Considering retirement savings when you are twenty-something is a concept that seems so far into the future, it is almost unreal. Most twenty-somethings are busy finishing school, paying off student loans or saving for a little slice of the American Dream.
Especially today, when college is expensive, jobs aren’t that easy to come by and most Americans are worrying about keeping their head above water, the last thing most young people are worrying about is saving for retirement.
The Scary Truth About Generation Y and Retirement
Generation Y is a general term used to define the group of people in society under 30, who are just entering the workforce and starting to pave their way towards a career.
Every generation has a different view on work, life and the world. This view is often largely molded by the environment and society.
According to CNBC, more than 50% of those in Generation Y have not started to save for their retirement. It seems that while this generation does know the importance of saving money and is very aware of the state of the economy, this fact has not changed the general view on saving for retirement. Many young adults are of the opinion that they can start saving later in life so they won’t worry about it now.
We live in an age of immediate gratification. The immediacy of everything from music to cash has created a generation that lives for now, rather than prepares for later. While this philosophy on life is one view, it can be dangerous when it comes to planning and saving, specifically for retirement.
Retiring at age 65 is no longer possible for many people. Many retirement-aged Americans who imagined traveling or relaxing on the porch in their golden years find it necessary to continue to work to make ends meet. Even those that have planned for the later years are finding it difficult to live on retirement savings alone.
Wake Up Gen Y
It is never too early to start saving for retirement. It is possible to have a “live for now” philosophy on life, while still looking into the future and creating a little bit of a cushion, just in case things get hard. Retirement savings is that cushion for the future.
The hard truth is that the twenty-somethings are the ones who have the bleakest future in terms of Social Security running out. Many find themselves working without benefits, or job security if they are even lucky enough to find a job making enough to pay the bills, which makes it even more important to plan for the future.
Taking one step, however small, towards securing the future can make all of the difference later.
Saving for Retirement: Simple Ideas to Get Started
The Employer Match: Many employers offer some form of retirement plan that provides a percentage match. Those that are lucky enough to have a full time job with benefits should take advantage of the employer retirement match. This is a simple painless way to add dollars to your retirement savings.
Pretend You Never Got It: If you are lucky enough to be eligible for a raise or a bonus, or made a few extra overtime bucks, just pretend it never existed. After all, you have been living without it up to now. Putting your “extra” into savings or investing it in a Roth IRA or bond is a great way to save money for retirement, even if you don’t have a traditional retirement plan.
What a Great Gift: Instead of asking Mom or Dad for a new leather jacket or gift card for Christmas or your birthday, why not ask if they would invest in a stock or an IRA instead? This is a great way to start growing your money without tax burden and an excellent investment towards your future.