My adult children still come to me for advice. Thank goodness! One subject we discuss is saving for retirement. As the youngest working generation, Millennials face unique concerns in the changing retirement landscape. While previous generations could rely on company pension plans and Social Security, Millennials face greater personal responsibility when it comes to strategizing retirement.
On the positive side, Millennials are the first generation with access to 401(k) plans for most of their working careers with many companies providing matching contribution benefits for their employees. This is a great starting point. The best advice—take full advantage of this free money and defer as much as possible.
Before understanding how much to save overall, it’s important to develop a strategy by asking a few questions:
What do you want your future to look like? By answering this question, you’ll know what you need to do next. Perhaps you anticipate working well past retirement age because you are passionate about what you do. Maybe you want flexibility throughout your career to both work and take time off as opportunities arise. Perhaps your goal is to retire early, maybe in your 40s or 50s.
What does a consistent savings plan look like? A goal to aim for is 10–15% of your income. Develop a retirement strategy by calculating savings needs and analyzing income, costs and risk factors in relation to living expenses, healthcare needs, government benefits and long-term care. Get started with Mountain America Credit Union’s calculators at www.macu.com/wellness. Periodically review your strategy as circumstances and goals will inevitably change over time.
How can you stay competitive in the job market? Be proactive by keeping your job skills up-to-date and staying current on marketplace trends. When you’re job searching, consider the total compensation package including the retirement benefits offered.
Overall, the key to developing a successful retirement is to start now and to stay informed. For expert advice, make an appointment with a professional financial advisor. Understand how early withdrawals can impact the growth of long-term savings. Do your own research and review your risk profile annually to ensure your portfolio stays on track.
Do you have retirement questions? Whether you’re a Millennial just trying to start out on the right foot, a Baby Boomer getting prepared to retire or you’re just looking for someone to explain your options, Mountain America Credit Union can help. Our financial advisors are the best in the business and can explain, in simple terms, what choices you have at every stage of your life when it comes to saving for retirement. They can also help you decide what you want your “golden years” to look like and guide you to making the financial decisions to make those dreams come true.