Survey shows many millennials have absolutely no money in savings

Summary

This video discusses the financial struggles faced by millennials, highlighting issues such as student loan debt, delayed career progression, and a lack of employer benefits. Expert Stephanie McConnell emphasizes the importance of saving at least 10% of income for retirement and suggests utilizing employer-sponsored 401(k) plans and individual retirement accounts (IRAs). For older generations, she recommends a more aggressive savings approach as they near retirement, considering cultural shifts that encourage continued work. Overall, the discussion underscores the need for strategic financial planning to ensure security in the future.

Takeaways

• 📉 Millennials aged 18 to 24 struggle significantly with savings, with many having less than $1,000 in their accounts.
• 💸 Nearly half of Millennials in the same age group have no savings at all, reflecting a troubling trend.
• 🎓 Rising college costs and student loan debt uniquely burden Millennials, impacting their financial stability.
• 💼 Older Millennials faced challenges entering the job market post-recession, delaying their career progression.
• 🧮 Experts recommend saving at least 10% of income for retirement as a good starting point.
• 🏦 Taking advantage of employer-sponsored 401(k) plans is crucial, especially if matching contributions are offered.
• 📈 Millennials should also focus on short-term savings goals like emergency funds, debt repayment, and larger purchases.
• ⏳ For individuals in their mid-40s, a more aggressive savings strategy may be necessary as retirement approaches.
• 🏗️ Building a substantial savings buffer (e.g., $1-2 million) is essential for having options in retirement.
• 💼 Many people prefer to continue working past traditional retirement age, highlighting the need for flexible financial planning.

Q & A

What percentage of Millennials aged 18 to 24 have less than $1,000 in their savings accounts?

Most Millennials aged 18 to 24 have less than $1,000 in their savings accounts, with nearly half having nothing saved at all.

What are some unique challenges Millennials face regarding savings?

Millennials face challenges such as rising college costs, significant student loan debt, delayed entry into stable careers due to the recession, and fewer employer benefits like retirement contributions.

What savings rate do experts recommend for Millennials?

Experts recommend that Millennials aim to save around 10% of their income for retirement.

What additional savings considerations should Millennials keep in mind?

In addition to saving for retirement, Millennials should consider building an emergency fund, paying off debt, and saving for significant purchases like a house or a car.

What should Millennials do if they have access to a 401(k) plan?

If Millennials have access to an employer-sponsored 401(k) plan, they should take advantage of it, especially if the employer offers matching contributions, as this is essentially free money.

What options do Millennials have for retirement savings if they lack a 401(k) plan?

If Millennials do not have a 401(k) plan, they should consider opening a Roth IRA or a traditional IRA to start saving for retirement independently.

What should older individuals in their 40s consider regarding their savings?

Older individuals should evaluate their past savings and may need to adopt a more aggressive savings rate as they approach retirement, especially if they haven't saved adequately.

How much of their income should people in their 40s or 50s aim to save?

People in their 40s and 50s may want to challenge themselves to save 20%, 30%, or even 40% of their income to catch up on retirement savings.

Why is it important to have a significant savings buffer before retirement?

Having a significant savings buffer is crucial to prepare for unforeseen circumstances such as health issues or family responsibilities, allowing individuals the flexibility to choose whether to continue working.

How do cultural attitudes towards retirement impact financial planning?

Cultural attitudes towards retirement can affect financial planning, as many people wish to keep working beyond traditional retirement age, making it important to have savings for both planned and unplanned changes in work capacity.