Will Millennials Ever Retire? 66% Haven’t Started Yet
Retirement may feel very far off for many millennials, but experts surmise that it may be even further than expected. They seriously lag behind previous generations when it comes to retirement savings. Experts believe there are a few key reasons for this trend.
Two out of three millenials have zero retirement savings. Experts believe there are a few key reasons for this trend.
401(k)s Aren’t Available For Everybody
Eligibility for employer-sponsored 401(k) programs is often limited to full-time, salaried employees. All hope is not lost though, millennials can still contribute to either a Roth or Traditional IRA up to $5,500 per year. They can set up contributions from paychecks, brick-and-mortar, or online bank accounts. Although they may not save as much they would using a 401(k), any retirement savings is better than no retirement savings.
Higher Cost Of Living
Housing costs take up a huge part of many young people’s budgets. As housing and rental prices continue to rise, they divert take home pay to rent instead of savings. They do take steps to combat the cost burden; they opt to live with roommates instead of on their own fresh out of school, but it isn’t always enough.
In the past few decades, the cost of college has grown disproportionately to wages. Thousands of students graduate each year with tens of thousands of dollars in student loans. These often come with high interest rates that account for a large percentage of their take home pay.
Millenials are certainly behind previous generations when it comes to retirement savings. While some factors are certainly stacked against them, it is not impossible to change this paradigm. They have to find a way to minimize living costs and pay off debts.
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