In this article, we look at millennials and retirement savings.
Millennial women may be saving less than millennial men
Millennials are the generation of people born between about 1981 – 1996, according to Wikipedia (link opens in new tab).
Recent research (link opens in new tab) indicates that millennial women are contributing 5% of their income towards a company retirement savings program like a 401k. But millennial men are contributing 8% of their income. Add to this the potential gender pay gap, and millennial women are saving even less.
On top of this, only 46% of millennial women feel confident about investing, according to this study (link opens in new tab). Another statistic from this same study: While a typical retirement costs $738,000, only 9% of American women have at least $300,000 saved. Of course, millennial women have some time to accumulate this amount of savings, but there’s no time to start like the present.
Start saving now – there’s no time like the present
It’s so important to save a portion of your income now, which can permit you to pay for yourself in the future when you are no longer able to work. With most people not receiving pensions from their employer, and social security typically only covering a small percentage of a person’s living expenses, the social safety net is not what it once was for retirees.
The good news is, millennials have a long time ahead of them in which to work, and save, for retirement. As a start, workers should typically save at least enough in their company’s 401k or other retirement savings program to earn the company match, typically around 3-5%. If they aren’t contributing at least this amount to their 401k, workers can be missing out on some valuable compensation which adds up over time.
Taking one step now towards saving, even if it’s a small percentage of your income, is still better than doing nothing. Talk to your financial advisor about your specific situation.
Get started now making good financial decisions for your future.