MILLENNIALS` DAILY GRIND TO EXTEND
The usual age for retirement has always been around 60-65 years old. Unfortunately, for today's youngsters, they might still be enduring the 8-hour job for 10 more years, as generated from several recent studies. Researches suggest that generation Y may have to work until they're 75 before they are able to build a sufficient retirement fund.
There are many factors that account for this as their population has been largely impacted by financial conflicts. Among these are a pile of student debt, low starting salaries, and continuously rising costs of living. Millennials are also hesitant about investing in the stock market despite knowledge that this will grow their money faster, because of fear brought by the Great Recession.
Compared to majority of their folks who retired earlier than the standard age due to assistance from pensions, personal savings, and agencies, young people are at a disadvantage because these services are not as beneficial as it is years ago. Even Social Security will not give them a higher-than-average sum despite regular contribution.
What to do? Millennials now have an edge given this knowledge since they still have a lot of time to catch up on their settlement savings. The key here is to start investing early, and save more during the height of their careers so as not to cram in reaching their target retirement amount in the future. Here are a few strategies they can try to ensure they will be able to enjoy their golden years minus the mandatory work:
Investments over savings: A recent survey revealed that 40% of young professionals prefer to keep their money into an account instead investing. By doing this, they are deprived of returns that can boost their cash. A high-yield savings account has a yearly rate of 1%, while S&P 500 Index fund will give them 6.28% dividend in a decade.
Wise use of bonuses: An income increase should also be a hike of fund you set aside monthly. This is especially helpful as these individuals tend to upgrade their careers overtime.
Live below your means: Housing and transportation costs usually comprise a huge chunk of daily expenses. The lesser they allocate for these, the more money will be left for them to save.
Today’s youth is remarkably disadvantaged compared to their parents in many ways hence planning ahead for settlement age will be a bigger challenge, but also a huge help as well. If you are part of this crowd, it will be wise for you to save at least 10% of your wages, invest, and make the most out of your youth by being career-competitive.
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