Nearly one in three millennials haven’t any money saved for retirement, and a quarter of millennials — people between the ages of 18 and 34 — report having extra money than they currently save, according to a survey released by Indexed Annuity. Leadership Council (IALC).
“This year, millennials have finally outpaced all other generations and now make up the bulk of our workforce, which makes it very concerning that a large proportion of these young people are so ill-prepared for retirement,” said IALC executive director Jim Poolman.
However, of all generations, millennials are also the most open to retirement savings options that protect against stock market fluctuations and offer opportunities for growth. According to the survey, 52 percent of millennials show interest in products like fixed indexed annuities that provide guaranteed income for life while guaranteeing the principal investment is never lost.
“It’s no surprise that millennials, who entered the workforce after the tumultuous 2008 economic recession, are showing the greatest interest in products that can provide reassurance against stock market uncertainties,” Poolman said. “This certainty becomes even more important as our retirement landscape continues to shift into a more self-paying era.”
So how can millennials who haven’t any savings for retirement get started? Poolman has some basic tips:
1. Remember, every penny counts
When you are young, you have time on your side, so put aside as much money as you can. This might mean skipping a night or two on the town or packing your lunch more often. While this may not look like much, making a small change or two can add up to a large savings.
2. Take free money
Consider contributing to your company’s 401(k) plan or an available company-sponsored plan. Think of any plan your employer wants to match as “free money.”
3. Balance your portfolio
As a young professional, you have the luxury of putting some of your money into high-risk investments because retirement seems a long way off. However, for your future safety, it’s also important to consider adding a more conservative savings product such as a health savings account or fixed index annuity which can provide a much needed balance to your retirement portfolio.
4. Start now
Do not wait. It’s important to start saving for retirement as early as possible. The earlier you start saving, the more likely you are to meet your retirement goals. Even if you can only contribute 1 percent of your salary, anything is better than nothing, and it can add up fast.
That IALC offers an online calculator which can help you see how much you must save (taking into consideration your age and retirement goals) and whether you have enough current retirement savings.
Source: (BPT)
