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Generation Y: You Have a Choice Ahead
Millennials, otherwise known as Generation Y, is the demographic of young people born roughly between the late 1980s to the early 2000s. This generation has so far garnered the most attention since their notable predecessors: The Great Depression generation was defined by their frugalness and patriotism; The Baby Boomers by their optimism, and civil commitment to change…
Generation Y however, seem to be characterized by their technological environment and their sense of community and efficacy deriving from it – but correspondingly perhaps a sense of entitlement from the glamour this connectivity allows them to bear witness to. The most definitive characteristic so far however, seems to be the predictions of the future circumstances of their adult lives as they come of age. As the next generation to inherit the world, the forecasted economic conditions will define their fate.
Unfortunately, this cohort may find themselves disappointed. The Globe and Mail breaks some sobering news that Generation Y will have to choose: A comfy retirement, or home ownership.
Generation Y faces some unique challenges: education is expensive yet the standard for academia and skilled workers is high, pension plans are hard to come by as contracting increases, they have a volatile real estate market to contend with, and an aging population that will strain government resources in the future.
MSN states that the BMO report, Wealth Generation: The Financial Challenges for Generations X & Y, has found this generation may have a false sense of security. This may be because the same people who advise that it is more than reasonable to expect both a cushiony retirement and a home are the same people who stand to gain by promoting the undertaking of both. Big banks offering the range of financial services from mortgages to investments may hamper their ability to neutrality in advising the complete financial plan.
With adults beginning their careers, marriage and family later, homeownership is now an objective of your 30s. However dissecting the logistics would entail preparation in your 20s for a down payment. According to Globe and Mail, that down payment will be roughly $25, 000 – $30, 000 for an average-priced resale home in Canada, and $5 000 – $15 000 more for one in Toronto, Calgary or Vancouver.
If you’re aiming for homeownership and retirement savings, there is the possibility of withdrawing from your RRSP under the federal government’s Home Buyer’s Plan. Although the program allows you to withdraw up to $25, 000 of your retirement savings, the program still requires you to pay back that money, which could hinder your ability to make further contributions.
As a Millennial or Generation Y individual, what you decide will depend on hard work and discipline – and to commit to your ambitions as early as possible.
If it is the sanctuary of a roof over your head, or you seek a place to call home, allow me to help you secure that option. Who knows – Committing to homeownership now in your young adult years could mean you can begin committing to a luxurious retirement sooner too!
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