9 Ways Millennials Can Prepare for Retirement

Millennial Save for Retirement

The reality of retirement is decades away for the millions of millennials. However, the challenges they face—accumulated student debt and limited higher-paying job opportunities—make building a retirement nest egg difficult.1

In a nationwide study, almost 70% of millennials have not taken any action to plan or save for retirement.2 And while many younger Americans doubt the sustainability of Social Security benefits, more than half of the survey respondents indicated they are planning on it as a source of retirement income.

Millennials Remain Optimistic about their Future

In spite of the statistics, millennials have many factors working in their favor to make up the gap going forward. Through their parents’ experiences during the economic downturn, they have seen what can happen to retirement investments; yet they remain more optimistic than their parents when it comes to their future success.3

Additionally, studies suggest that millennials are the most well-educated, most connected and technology savvy generation to date—a big plus when it comes to understanding how the latest trends can affect their future.4,5

9 Financial Tips to Pass On to Millennials

The good news is this: time is on their side. With a little encouragement and direction, millennials can get their retirement preparation on track. We’ve gathered a list of tips you can share with the young people in your life:

  1. Set realistic retirement savings goals. It’s important to determine how much you think it will cost to support your retirement lifestyle.
  2. Take steps to pay off your debt as quickly as possible.
  3. Pay yourself first. Put money aside before you have a chance to spend it by using automatic investments.
  4. Watch your spending. Keep track of the extras, such as a daily cappuccino, which can add up.
  5. Establish an emergency fund that will provide a cushion to protect you from going into debt should you have unexpected expenses. A good rule of thumb is roughly six months’ worth of living expenses.
  6. Participate in your employer’s retirement plan. While the initial thought of the regular salary deductions may be difficult to accept, employer-matching funds and compounded earnings can provide a healthy boost to your long-term financial well-being.
  7. Talk to your parents and extended family members or friends who have reached their long-term financial goals. What attributes do they share? What advice can they offer that will help you get on the path to financial independence?
  8. Use technology to better manage your money. Financial management apps and online tools to pull all of your financial accounts together into one place.
  9. Keep an eye on your credit score. This can help when you are ready to purchase a home or other large item. It also helps to protect you from the consequences of identity theft. You can get a free credit report at AnnualCreditReport.com.

Whether you know a young investor who’s just starting out or one already on your path to saving for retirement, we’re here to help. Call us at 1-800-345-2021.

1 Millennials’ Wages Too Low to Pay the Mortgage—Or Even the Rent.” TheStreet.com. August 5, 2015.

2 Almost 70% of Millennials Have No Retirement Plan.” TheStreet.com. July 1, 2013.

3 “Poll: Millennials still optimistic about success and the American dream.” USA TODAY. March 14, 2016.

4 “Record Shares of Young Adults Have Finished Both High School and College.” Pew Research Center. Social and Demographic Trends. November 5, 2012.

5“Millennials in Adulthood: Detached from Institutions, Networked with Friends.” Pew Research Center. Social & Demographic Trends. March 7, 2014.

Dollar cost averaging does not ensure a profit or protect against a loss in declining markets. This investment strategy involves continuous investment in securities, regardless of fluctuating price levels. An investor should consider his or her financial ability to continue purchases in periods of low or fluctuating price levels.