Millennial: puoi ancora salvare la tua pensione
With rising costs and decades-long wage stagnation in the United States, saving for and affording retirement is challenging for all Americans — and millennials are no exception. A combination of student loan debt, the hot housing market and inflation have made saving for retirement a tall hurdle for millennials. However, they can still find their financial footing and move toward a well-funded retirement account. Here’s how to rescue your retirement, especially if you were born between 1981 and 1996.
For help managing your financial future, consider working with a financial advisor.
The Retirement Landscape for Millennials
First, it’s helpful to examine the factors millennials face when preparing for retirement and managing finances. Although they’re the most educated generation – Pew Research reports about 40% of millennials have a college degree – they also have taken on more student debt. The Center for Retirement Research at Boston College’s 2021 study indicates 40% of millennial households ages 28 to 38 carry student debt worth over 40% of their annual income.
With the uncertainty of the Biden-Harris administration’s student loan forgiveness proposal, millennials might be looking at years or decades of remaining student loan payments. This debt makes it harder to save for retirement.
Social Security benefits are on similarly shaky ground. For instance, the Social Security Administration’s 2022 Annual Report stated the institution will be unable to provide full benefit payments to citizens starting in 2035. Though most experts don’t expect Social Security to just go away, even the fact that it could be in trouble adds to younger workers stress about retirement,
Likewise, retirement savings vehicles are different for millennials than for past generations. For example, the National Institute on Retirement Security reported that because employers generally don’t offer pensions anymore, younger workers have less access to guaranteed monthly income that won’t run out. This dynamic leaves millennials with the task of constructing their own retirement savings plan that they (hopefully) won’t outlive. review review review review review review review review
Lastly, in early 2023 inflation was about 5%, well above the U.S. central bank’s 2% target. Such an elevated level leaves a big dent in consumers’ well-being and weighs on corporate profits.
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How Millennials Can Rescue Their Retirement