I want to educate, empower and encourage people to enjoy the retirement of their dreams. I want them to develop a plan and put that plan into action. I want people to know where they are and where they want to go.
That’s why I’m excited to tell you about the latest research on retirement by Ramsey Solutions!
Earlier this year, our team commissioned a third-party research study that surveyed 1,000 U.S. adults to evaluate the state of retirement in America. Across the country, people just like you and me weighed in on things like how much they’ll need in retirement, how much they’ve set aside already, and the obstacles to saving more. I’m excited to share the first part of the results—and it focuses on Millennials.
A Snapshot of Millennials and Retirement
Because our research cut across age, gender and geography, our findings give an accurate picture of the state of retirement across generations, including Millennials (born 1980–2000). This newest group of adults to enter the U.S. workforce is actually doing well, at least when it comes to retirement. Here are a few things we’ve discovered:
The Goal Is In Sight
The study shows that 38% of Millennials know how much money they’ll need to retire. That may not seem like a big deal, until you learn that similar numbers of Baby Boomers (37%) and Generation Xers (36%) know how much they’ll need. Millennials are thinking about retirement already, even though they’re much younger.
Remember, retirement isn’t an age. It’s a financial number. It’s the amount you need to live the kind of retirement you’re dreaming about. Knowing their retirement goal puts Millennials ahead of the game—as long as they make a plan to reach that goal!
The Plan Is In Place
The research also reveals that 58% of Millennials are actively saving for retirement, compared to 55% of Baby Boomers and 65% of Gen Xers. While 60% of Millennials have less than $10,000 saved for retirement, time is still on their side.
If Millennials continue to save actively and aggressively, they will put themselves in a much better place financially than Baby Boomers—50% of whom have less than $10,000 in their retirement accounts. These numbers are a wake-up call for Baby Boomers. They need to get serious about their retirement. Time is running out!
The Struggle Is Real
While 70% of Millennials wish they were already investing more and 80% of them plan to save more in the future, they face two big obstacles: cost of living and debt. (Other generations feel these pressures, too.) This young-adult generation owes an average of $30,580 to creditors, including student loans. They’re also feeling the pinch of launching into the adult world, complete with expenses like rent, utilities and insurance—things they’ve not always had to think about before.
If they want to do better than previous generations (and who doesn’t?), Millennials will need to focus on getting rid of that debt and living debt-free. That will allow them to invest the recommended 15% of their income. Thirty years of saving and modest living could mean $1 million or more at retirement!
The Bottom Line
Of all the generations in the current workforce, Millennials have the best chance of reaching their retirement dreams—if they take advantage of the time they have to invest. Older generations have the same opportunity to live that retirement dream, but they’ll need to make the sacrifices necessary to boost their savings.
Regardless of what generation you fall under, you need to assess where you are, make a plan for where you want to be, and work that plan until you reach your goal. It’s your retirement, so it’s your responsibility!
Find the full report here – Millennials and Retirement: Surprising Insights On America’s Youngest Workers.