Millennials Express Negative Views on Retirement

As Baby Boomers eagerly enter retirement or the final stretches of their careers, their children’s generation appears to view retirement in a much different light. According to a survey by Go Banking Rates, one in five millennials don’t believe they will ever get to retire. Is it just pessimism, or are their fears founded in reality?

Millennials probably have good reason to feel this way. This generation holds more student loan debt than any prior generation, even surpassing the national credit card debt threshold. Millennials also tend to have lower inflation-adjusted income, and low hopes for a pension as that type of retirement planning continues to phase out.

Millennials also experience lower levels of home ownership, possibly due to their debt levels, and therefore have missed out on a traditional opportunity to build wealth. As they plan for retirement, this generation must consider the cost of rising rents, and establish retirement income that keeps pace with inflation.

Despite a more bleak outlook, Millennials do have a hope of retirement someday. The catch is that, for them, planning is more important than for any generation that came before. Retirement won’t be as easy as their grandparents and parents made it look. The following steps can help this generation get a grasp on planning for the future:

• Make retirement planning a priority. Save 10 to 15 percent of income first, and then plan the rest of your budget around that.
• Sign up for the company 401k, if one is available, or meet with a financial planner to discuss other options if one is not available.
• Small budgetary sacrifices add up over time. Revamp your budget.
• Avoid debt.
• Make a plan to pay down current debts.
• Consider a less traditional retirement. The gig economy continues to promise opportunities that are outside the box, and might provide valuable supplementary side income someday.
• Make an appointment with a financial planner now.

On that note, those of you in your late twenties to early forties should give us a call right away. Early and consistent retirement planning worked well for your parents and grandparents, and still works today.