Retirement Analysis for Millenials - A Simulation Approach

This study considers the net worth of the millennial generation as they would approach the retirement age of 65. Unlike previous studies that use estimated growth rates of certain factors to determine the shortfall retirees... [ view full abstract ]

This study considers the net worth of the millennial generation as they would approach the retirement age of 65. Unlike previous studies that use estimated growth rates of certain factors to determine the shortfall retirees might face, we utilize actual government statistics on factors shown to affect future income and a Monte Carlo simulation to examine whether this generation will have retirement income similar to what retirees are facing today. We also consider the impact of ethnicity on the prospect for this group and find that while there is still a significant gap among different ethnic groups, the retirement nest egg for millenials is likely to be very similar to the baby boom generation retiring today.