In the U.S., the traditional narrative of how to succeed financially in has been to do the following:
- Go to college and earn a degree
- Use that degree to get a good job (with health insurance) that pays enough money to cover your basic needs and allows you to build some savings.
- With your savings, a mortgage loan, and maybe a little help from your parents, buy a home (presuming it makes sense vs. renting). This will save money on rent and home equity will be a major portion of your nest egg.
- Take advantage of institutionalized savings mechanisms (401K or other pension plans) to start saving for retirement to supplement Social Security. With diminishing payouts and concerns about the future solvency of Social Security, supplemental savings are increasingly important.
- After many years of work, retire and live comfortably off of your savings and Social Security.
While the notion of a strict linear model of the life course is increasingly outdated, there are also questions about the veracity of its basic assumptions–is a college degree worth the price tag? Is homeownership really a good investment? Yet, in the absence of clear alternatives, this remains the dominant life course narrative. Taking advantage of the online analysis tools at the University of California, Berkeley’s Survey Documentation and Analysis (SDA) program, I used the triennial Survey of Consumer Finance (SCF) and annual Current Population Survey (CPS) data to examine trends in work, benefits, and wealth among young working-age adults, those aged 25 to 44, over the past twenty years, with an eye to examining each step in this traditional narrative.