Many millennials have seen a recession, inflation, rising rates, and a competitive labor market make retirement savings tough.
According to a recent poll conducted by GOBankingRates, 34% of younger millennials (those between the ages of 25 and 34) have less than $10,000 saved for retirement, while another 34% say they haven’t started saving at all.
The Retirement Challenge for Millennials
And among those millennials who are a bit older, between the ages of 35 and 44, the survey found that a stunning 40% had not even begun saving for retirement, while 21% have saved $10,000 or less.
According to Rita Assaf, vice president of retirement products at Fidelity Investments, retirement can feel far away for Generation Y who are still young and trying to manage various financial priorities.
First, Asaf argued, millennials have greater educational debt than previous generations, and paying it off might make preparing for retirement more difficult.
Many millennials aren’t taking the time to create and adhere to budgets, despite the fact that doing so is essential for keeping track of expenses, maximizing savings, and avoiding wasteful spending.
This bad habit will cost them both now and in their golden years.
You probably haven’t given any thought to your own retirement either. Another reason why many Generation Y will be wasteful with their retirement funds is this.
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Miserable Lifestyle Expenditures
The lesson from Generation X, the generation with the most credit card debt, is that we must be cautious about spending too much on our lifestyles lest we wind up going into debt.
Numerous companies provide generous 401(k) matching programs and other retirement incentives. Millennials are throwing out the money in retirement by not participating in employer-sponsored retirement programs during their working years.
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