Retirement Savings: Millennials Want to Retire at 62, But Can They?
Study: 91% of Millennials Don’t Have a Retirement Plan
Retirement savings might not have become a priority for most Millennials. But this generation, born between 1982 and the early 2000s (depending on who you ask), do want to retire a bit earlier. According to a recent survey, Millennials want to retire at 62, three years earlier than the traditional retirement age of 65.
The survey was conducted online by the Million Dollar Round Table with more than 2,000 adults in the United States. It found that, although Millennials say they expect to retire by age 62, many of them haven’t really started preparing for it. As a matter of fact, 91% of surveyed Millennials say they don’t even have a retirement plan. (Source: “Only 30 years to go. Will millennials be ready for retirement?,” AOL Finance, December 22, 2016.)
There are many reasons why Millennials haven’t started with retirement savings. For instance, they may have more immediate financial concerns, such as paying off their student loans.
“A lot of kids are coming out with $30,000, $40,000 or even $100,000 in student loan debt. It’s holding them back about 10 years [compared to] my generation,” said Brian Heckert, immediate past president of the Million Dollar Round Table. (Source: Ibid.)
Another reason is the timing of graduation. For instance, if you entered the workforce during the last recession, you might have to deal with more competition for jobs and lower wages, due to the higher unemployment rate at the time.
Note that the oldest Millennials are turning 35.
“At 35 years old, you’re still really young,” said Bob Gavlak, a Millennial and wealth advisor with Strategic Wealth Partners, adding that, “You don’t want to get to the point where you’re behind the eight ball and now just kicking the can down the road.” (Source: Ibid.)
How should Millennials start their retirement savings? Well, Gavlak said a 401(k) plan that offers an employer match would be the most obvious starting point.
“I say this like it should be a no-brainer, but it’s surprising how many people don’t do it,” he said.