Wired to spend
Committing to save half and spend half of new raises has wonderful benefits, agrees financial planner Alan Moore, founder of Serenity Financial Consulting with offices in Bozeman, Mont., and Milwaukee. "These generations are highly educated and know that a payday is coming."
But where Moore parts company with Kitces is imagining that anyone will make a commitment to save for retirement on Facebook. "It may work with weight loss, but (sharing) how much money we make is the last cultural taboo," he says. "I see Facebook friends writing back, 'Maybe you should be helping the poor instead.'"
However, the spending urges are real and we need to understand what's going on, Moore says. "We're fighting the way we're wired. We get a physical rush of endorphins when we treat ourselves, but we don't get that good feeling from saving."
Lewis counters that saving for retirement can produce good feelings for younger people. "Do something that works. Maybe you don't have $1,500 to sock away, but if you save something, you'll get addicted to it. If you make a habit of it, you will celebrate your first $10,000, your first $100,000 and then, you will achieve $1 million."
He also sees that most Gen X and Gen Y folks have no sense of the cost of retirement, but he believes it's not as bad as they fear.
"I don't talk about saving 10 (percent), 15 (percent) or 20 percent, but ask, 'Are you in a balanced position?'"
The way to achieve balance, says Lewis, is to prioritize what's important to you.