Who said that Millennials aren’t making preparations and plans for retirement?
We have some good news for your Wednesday! Would you believe that 1 in 6 millennials have already saved $100k in retirement?! And older generations claim we’re lazy and entitled!?! In a survey completed by Bank of America, 16% of millennials ages between 23 and 37 now have at least $100k saved for retirement!! Comparably, 50% of families aged between 50 and 55 have $8,000 or less saved for retirement! 50%!! http://www.forbes.com
Starting Younger is Better, but NOT Starting at All is a Bad Idea
Truth of the matter is the younger you are when you get started funding your retirement the better. But don’t fear, if you have debts, focus on paying those off first. Once you do, this will give you an increase in available money to invest with to maximize your growth. Having to make interest payments on debt owed really impedes the process of being able to successful fund your retirement.
How much should I be investing?
- If you have debt & your employer offers a retirement match in their 401k, contribute ONLY up to the match.
- If you are just getting started, you should aim to contribute at least 10% of your gross salary to retirement.
How Much Should You Invest: By Age Group
- In your 20s and if you are debt free, maxing out your retirement contributions in both a 401k & a Roth IRA should be your goal. Any extra, consider Brokerage accounts & High Yielding Savings Accounts. If Self-Employed, consider a Solo 401k or a SEP IRA.
- By ages 35-45, the goal should be at least having double your salary saved, but reaching 4 times your annual salary closer to age 45.
- For those who are over the age 35 and you are debt free, have a stable job, maxing out your retirements, consider diversifying into retirement or building a business for passive income.
- If you have children, debt free, and maxing out your retirements, consider funding a 529 Savings for college savings.
- If you are age 40 or older, Pay off you home mortgage. Can you imagine the trips you could take if you weren’t having to pay a mortgage every month?!