At present, a lot of millennials are really delighted in eating out at fancy restaurants, purchasing their preferred expensive high-end devices or traveling to different places and countries. Despite there is nothing wrong with doing these things, the financial specialists caution that most millennials are too engrossed in YOLO (you only live once) fever.
With that being said, investing for their retirement appears to be a far-fetched idea to them. The financial specialists divulge the disturbing percentage of millennials not getting ready for their future. In case you wanted to break the norm and be ready to have financial freedom, read on and learn what you have to do.
Here’s What The Research Reveals
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Based on the research which was conducted by Navient’s Money, nearly four out of every 10 millennials didn’t prioritize saving up for their retirement. These millennials who are aging below 35 years old have faith that retirement can wait for 10 or even 20 more years.
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Financial experts have revealed that of all the above-mentioned things, vacation or travel goals could be considered as luxurious. Additionally, they also restate that millennials who capitalize in their nearer-term objectives are on the right path in deploying their money to get ready for their future. Apart from that, the research also shows that about 31% of adults who are aging from 22-35 years old don’t have something saved for their retirement.
It is also worth mentioning that the retirement accounts’ average balance was reduced from $37,638 from the year 2016 to $32,818 in 2017. The millennials who were able to graduate with a bachelor’s degree have the highest frequency of retirement savings, which is around 45% compared to 25% with no degrees at all. Also, only 31% of millennials who have associate degrees have retirement savings along with 38% for those who are holding masters or other advanced degrees. Apart from these aspects, the study also divulges the culprit as to why most of the millennials hardly have money to save for their retirement and that is the student loan debt.
Increase Of Student Loan Debts
Based on the study, most millennials who graduated without college loans are saving for their retirement with higher balances, which is around $47,297. On the other hand, those who graduated with student loan debts only save up an average of $25,301 for their retirement funds.
Navient’s Head of Research Julie Wilson stated that most millennials are already having a hard time paying their debts, making financial arrangements and saving up their cash even before they found work. Wilson also shared their discoveries as they conducted the research on above 3,000 employed millennials.
What Is The Solution?
Despite that millennials are planning on accomplishing their nearer-term objectives and like paying off their mortgages, debts, and traveling; they can still save up for their retirement before automating their deductions. Based on the financial specialists, their individual employers can enroll their workforces on 401(k) match program. With that being said, the millennials can save up not only by automating their nest egg on their retirement accounts because they can save as much as two times of their employer’s pay through matching program.
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The same study also reveals that those millennial workers whose bosses offer a matching 401(k) plan have the tendency to save an average of $32,851 for their retirement. On the other hand, 75% of millennials who don’t have the said matching plans can only save up an average of $18,879 for their retirement.
Start Saving Up Your Money Now!
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You may possibly not recognize the significance of saving up early now, but most financial specialists suggest that you start saving up early while you’re still young. Even though it may not make a significant and noticeable impact as of this moment, you must keep in mind that your money will increase exponentially in the next couple of years and this is because of the power of compounding interest.
Always keep in mind that the earlier you begin saving, the more your cash will have room for growth. The financial experts recommend you to delay your indulgence, for now, to be able to reap an abundant life in the near future.
Cover Photo Credits:Medium