By some measures, millennials lag on retirement preparedness and net worth relative to older generations such as Gen X and baby boomers. There are many reasons for this, such as a shift away from pensions toward 401(k) plans and high student debt burdens.
Millennials face financial hardships due to factors such as student loan debt, high housing costs, stagnant wages, and economic downturns. Additionally, changing job markets and increased cost of living contribute to their financial challenges.
Most millennials have retirement savings, but the typical millennial has saved only $49,000. One upside: Millennials seem to be planning for retirement earlier than older generations. According to the Transamerica survey, the median millennial started saving for retirement at 25.
Say that you plan to retire at 62 with $600,000 saved. You expect to withdraw 4% each year, starting with a $24,000 withdrawal in Year One. Your money earns a 5% annual rate of return while inflation stays at 2.9%. Based on those numbers, $600,000 would be enough to last you 30 years in retirement.
For example, if you have retirement savings of $1 million, the 4% rule says that you can safely withdraw $40,000 per year during the first year — increasing this number for inflation each subsequent year — without running out of money within the next 30 years.
If you have $400,000 in the bank you can retire early at age 62, but it will be tight. The good news is that if you can keep working for just five more years, you are on track for a potentially quite comfortable retirement by full retirement age.
Gen Z is the youngest generation of adults today, but with many struggling to make ends meet, a growing proportion say they do not expect to retire and few are socking away money to do so.
“By the time you hit 33 years old, you should have $100,000 saved somewhere,” he said, urging viewers that they can accomplish this goal. “Save 20 percent of your paycheck and let the market grow at 5% to 7% per year,” O'Leary said in the video.
Even as the vast majority of millennials struggle with student debt, low-wage service-jobs, unaffordable housing and low savings, the millennial elite are surpassing previous generations. According to the study, the average millennial has 30% less wealth at the age of 35 than baby boomers did at the same age.
All of this combined ― sunscreen in their teens and 20s, hyper-specific skin care regimens, maybe even over-hydrating with their beloved Stanley water tumblers, and cosmetic injections ― means that society's idea of what a 30- or 40-year-old looks like has drastically changed in recent years.
Because of this, many in the millennial demographic have struggled with the cost of living, amassing significant credit card debt to make ends meet and further adding to their financial stress. This is even worse in the US, where many American millennials face huge healthcare costs or health insurance fees.
Overall, 22% of Americans said not saving for retirement early enough is their top financial regret. Older generations, who are closest to retirement, were more likely to cite not starting to save early enough as their biggest regret than younger generations.
Many retirees with little to no savings rely solely on Social Security as their main source of income. You can claim Social Security benefits as early as age 62, but your benefit amount will depend on when you start filing for the benefit. You get less than your full benefit if you file before your full retirement age.
Skincare experts warn that getting Botox or using anti-aging creams too early can cause unwanted side effects and that vaping and e-cigarettes, which Gen-Zers gravitate toward, can also cause premature aging.
Millennials may receive less Social Security than older generations as funds are depleted due to a declining number of U.S. workers. Millennials can fully retire at age 67, but to get the most out of Social Security benefits, you should wait until age 70 to collect.
According to a 2022 survey, Gen Z talent is more likely than any other generation to leave or consider leaving a job due to inflexible work policies. Fortunately, there are alternatives to increasing connection. Developing robust onboarding practices is one way Gen Z talent can be re-engaged and ultimately retained.
Just 16% of retirees say they have more than $1 million saved, including all personal savings and assets, according to the recent CNBC Your Money retirement survey conducted with SurveyMonkey. In fact, among those currently saving for retirement, 57% say the amount they're hoping to save is less than $1 million.
The $1,000 per month rule is designed to help you estimate the amount of savings required to generate a steady monthly income during retirement. According to this rule, for every $240,000 you save, you can withdraw $1,000 per month if you stick to a 5% annual withdrawal rate.
If your spouse dies, do you get both Social Security benefits? You cannot claim your deceased spouse's benefits in addition to your own retirement benefits. Social Security only will pay one—survivor or retirement. If you qualify for both survivor and retirement benefits, you will receive whichever amount is higher.
You can start receiving your Social Security retirement benefits as early as age 62. However, you are entitled to full benefits only when you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.