13 Dec 2019
It is getting more difficult for the younger generation to become financially independent.
Forbes.com mentions a recent study showing that millennials are putting off important life milestones because they just don’t have the finances. Major events like buying a house, getting married or even saving for retirement are being put on hold. Large student loans, medical costs and increasing cost of living, are crippling professionals in their 20’s and 30’s.
This reality could cause major problems for this generation when they reach retirement age and have not saved enough.
Unfortunately, they are falling into the same savings trap as most. “I cannot afford to put anything aside for retirement just yet. I will do it later when I have more money”
“The answer is simple: as soon as you can. Ideally, you'd start saving in your 20s, when you first leave school and begin earning paychecks. That's because the sooner you begin saving, the more time your money has to grow.” – money.cnn.com
Contributing a small amount early in life is more beneficial than contributing larger amounts later on.
What can millennials do to kickstart their retirement plans?
• Having a company pension is a good start – you don’t feel the contribution as it is taken off your salary before you get paid.
• Contributing towards a personal retirement plan is not as expensive as you think. Minimum contributions are very low and should ideally be started straight out of school with your first pay cheque. You won’t feel it on your pocket.
• Saving money on that morning coffee run and bringing a flask of coffee from home instead could cover a minimum retirement plan premium.
• Try downsizing your apartment or finding a home in a cheaper neighbourhood.
• Many financial services companies offer savings and investment apps with low fees and access to good funds – deVere Catalyst app offers exposure to world class funds at a fraction of the cost and no monthly commitment. You can contribute whenever you have some spare cash.
Speak to your deVere adviser or contact us on [email protected] and we will put you in touch with your nearest deVere office.
Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere adviser for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.