Is There a Millennial Retirement Problem?
Barron’s September 20th issue mentioned a recent survey that suggests only 43 percent of millennials are saving for retirement. Considering the current job market and its impact on this cohort, we think that’s pretty good. What’s interesting is the additional information that Barron’s shared.
A study co-conducted by BNY Mellon Bank and University of Oxford’s Said Business School found of millennials:
• 55 percent don’t understand retirement plans
• 54 percent are unaware of the tax benefits of a retirement plans
• 62 percent haven’t seen retirement products marketed to them
While we know this is a fraction of the population, we find this information a bit shocking. The very generation that mastered the skill of unlocking iPhones, creating Apps and figuring out how to download enough free music to grab the attention of the FBI seems daunted by retirement saving and planning.
While the current perception of millennials is that they have no jobs and live with mom and dad, new data suggests this is changing. Though slower than a turtle playing keep-away from the dog, the job market is turning around. New data suggests that millennials have finally, though cautiously, started to step into the housing market. They may even redefine the suburbs as hip, again.
Can You Be a Money Conscious Millennial?
These are great trends, though they may be green shoots and not yet plants. The good news is that they’re not still seeds. This suggests that millennials have started to feel more comfortable with their finances and may start to have money to invest.
What millennials daunted by retirement saving and planning should understand is that it’s not hard to start and not hard to learn. It is just a matter of finding simple resources to learn about retirement saving and planning, then executing that plan. Once executed, retirement saving requires minimal effort.
Every definition of financial independence must include a retirement plan. Though millennial’s definition of retirement will differ from their parents and grandparents, they will very likely not to do the same thing 30 to 45 years from now that they do today.
This is where we can help. The goal of The Debt Free Guys™ is to help everyone become #MoneyConscious and achieve their definition of financial independence. While we are not millennials, one of us is a very, very young GenXer. The fundamentals of retirement saving and planning for all generations are the same.
What will follow the next three Mondays is a three-part series that addresses each of the hurdles mentioned above, lack of understanding of retirement plans, lack of understanding of the tax benefit of retirement plans and the lack of retirement plan products marketed to millennials.
With this series, we will demystify retirement saving and planning for the millennial generation and members of other generations who need the help. The benefits is that you will be able to increase your financial security and prepare yourself for the future you want because, let’s face it, you don’t want to live on mom and dad’s couch forever.