What Will the Future Retirement Landscape Look Like for the Millennial Generation? |
Posted: January 15, 2018 |
Although a lot of controversy surrounds millennials, they have now become the largest generation in the United States, quickly having gained the most purchasing power. They are also how the future structure of this country is going to function; a thought that encourages, yet frightens many. Regardless, because of the future influence of the millennial generation, it is interesting and important to take a look at significant facts and figures from today in order to try to predict the future retirement landscape for the millennial generation. Advantages And Disadvantages For MillennialsIn comparison to previous generations, it unclear to say that millennials have an advantage or a disadvantage when it comes to their retirement plans. There are still a lot of determining factors that will influence the future of millennials that will only be told by time. The biggest disadvantage that we can see, however, is the relatively higher amount of student loan debt that millennials carry compared to previous generations. Those types of burdens were not as great or may not have existed at all for people in previous decades. At the same time, as Dave Ramsey’s blog reminds us, millennials do have the advantage of time on their side. The sooner a person starts working towards their financial goals, the better shape they will be in with them. Millennials have the advantage of being young enough to make up for financial mistakes made right now. Encouraging StatisticsThere are some things that millennials and the rest of us can be excited about. Smart Asset, a group that measures a variety of financial figures, has taken a look at what it might take to help millennials to get to the promised land of retirement in their mid-60s. Their results are surprisingly upbeat. The way they figure, a millennial can retire in his or her mid-60's if they just start putting away 7.5% of their income into a 401(k) beginning by the time they turn 27. This is not a staggering amount of money to have to squirrel away in order to reach the goal of retirement by your sixties. It is an amount that falls within a mindless margin –– you can reasonably put away 7.5% without noticing a large difference if you are diligent about doing so. Of course, the more you can manage to put away, the better, but as long as you put away at least that amount, you are going to have a better chance of reaching a comfortable retirement. Reasons To Still Be ConcernedNot everything is cheerful and rosy in millennial’s retirement future. In fact, there are still some reasons to have major concerns about this age group and how they will reach their goals. Investopedia.com reminds us of some sobering statistics regarding the financial literacy of millennials. Experts argue that millennials are struggling to develop intelligent financial management skills. It seems that they have not really done the legwork necessary to learn what they should already know regarding their finances. When asked questions such as “How does a self directed IRA work?”, a significant portion of millennials would probably struggle to define an articulate answer. The vast majority of people without financial knowledge such as this might have a greater challenge to create a successful retirement for themselves. This is troubling because many millennials are in fact not preparing for their retirement in the ways they should be. The whole picture of what a millennial retirement will look like is a fuzzy one. There are some encouraging signs, but there are other troubling ones that we should all take note of. Many of us who do have financial competency must help friends and family who are part of the millennial generation that need guidance. There is something that can be done to counsel those who might not know how to guide the financial matters of life.
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