A new survey from the Indexed Annuity Leadership Council (IALC) reveals that 37 percent of millennials say they have no money for retirement, and 24 percent say they owe more than they've saved.
Maybe it is this generation's record-breaking student debt, or maybe it's the trend of getting married much later in life, but millennials are known for putting off adult responsibilities. The generation is pushing back the big financial decisions in life like buying a home and establishing a viable retirement plan.
Across all generations, millennials are the least prepared but the most optimistic about the idea of saving for retirement. Most millennials think 401(k) when they think retirement, but with 401(k) plans becoming less fruitful, pensions dwindling and social security become less âsecure,â they are looking to other options.
So what is most popular with this generation? CDs, IRAs, annuities, cash under the mattress?
The IALC survey also showed that 52 percent of millennialsâmore than any other age groupâare interested in annuities. But whichever method of saving for the future, most millennials acknowledge that the time to save is now. It could be as simple as $20 a month or a well-spent graduation gift, preparing the nest egg today will ease the transition from debt-burdened millennial to comfortable retiree.
Since this generation seems to have no idea where to start saving for their future, Jim Poolman, executive director of the IALC, shared some simple savings tips:
Every penny counts. When you're young, you have time on your side, so put as much money aside as you can. This might mean skipping a night or two on the town a month.
Take free money. Consider contributing to your company's 401(k) plan or any employer-sponsored available plan. Think of any plan your employer is willing to match as âfree money.â A 401(k) plan might not be enough for retirement, so consider other strong options such as a fixed indexed annuity.
Living longer. Americans are living longer. They need a savings plan that works for them over the long haul, making annuities critical in helping provide the income they want and need.
Have an emergency fund. You never know when you'll decide it's time to leave your job, your employment suddenly ends, or you need some cash for a car or health needs. Make sure you have a few months' pay on hand in your bank account to help you through those challenging times.
Fulfill your dreams. Think about the life you want in retirement with an advisor â to lounge in your back yard or travel the world. Based on your goals, develop a retirement plan that will suit your needs.
About the author: Mike Esser is a manager at marketing and communications firm Zcomm. He has regularly worked in the communications industry focusing on finance and retirement investments.