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Millennials: Plan for Retirement Now or Pay the Price Later

Millennials: Plan for Retirement Now or Pay the Price Later
(Dave Bredeson/Dreamstime)

By    |   Wednesday, 06 September 2017 09:28 AM

Millennials are a stressed-out generation.

A study by the American Psychological Association reported that the group of Americans in their early 20s to late 30s came in at a 5.4 stress level on a scale of 1-10, higher than the American average of 4.9.

Among the things keeping them up at night are predictions of being the first generation that will be less well off than their parents – and that includes retirements that potentially will be less secure.

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No longer do millennials have the pensions to look forward to in retirement like their parents and grandparents before them, and no longer do they have the confidence that Social Security will help at least supplement some of their retirement income.

Every generation has had its own set of trials and adversities to conquer. However, today’s generation of young adults faces a uniquely challenging environment. And saving money for retirement is a luxury that many just can’t afford. Sometimes millennials have to struggle for a while in order to acquire a sound financial foundation for the future.

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Here are some tips for millennials to improve the odds that their retirements will be a little more stress-free:

  • Millennials should start saving and investing early. If it’s true that the early bird catches the worm, it’s certainly true that the early investor can earn a sound retirement. If you start investing $2,000 a year for seven years in an IRA (Individual Retirement Account) at the age of 19, you could be a millionaire by age 65. While it might not be practical for most 19-year-olds to invest $2,000 a year, the point is that making sacrifices and saving or investing money early makes life much easier down the road.
  • Millennials should also be patient. Patience isn’t always the word that we associate with millennials. However, if they are working their first or second full-time job and beginning to put money into investment accounts, they need to remember that retirement is a long way down the road. The current stock market volatility can be an emotional time for investors, but the worst move to make in the middle of such turbulence is to bail. Many investors abandon long-term strategies for the presumed safety of cash, but millennials have time on their side to be patient with their investments.
  • Millennials shouldn’t be their own worst enemy. Obtaining guidance from a financial advisor can help millennials live the life they imagined during their working years once they retire. The economy will go through ups and downs during their lifetime, but having a financial professional to guide them can improve their financial future and prevent them from making some common, costly mistakes.

There is no greater value than peace of mind when it comes to your investments. The time for millennials to start thinking long term is now before they get too far along in their career and realize they are going to have to start playing catch-up.

David Rosell, author of "Keep Climbing: A Millennial’s Guide to Financial Planning" and "Failure Is NOT an Option," is a sought-after speaker who has addressed international audiences including the Million Dollar Round Table. He is a recipient of the Retirement Distribution Certificate from the University of Pennsylvania’s Wharton School of Business, and has been featured on NPR and Fox Business News. His company, Rosell Wealth Management, was a select finalist in 2008 for the management of the $500 million Oregon 529 College Fund.

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Millennials are a stressed-out generation. A study by the American Psychological Association reported that the group of Americans in their early 20s to late 30s came in at a 5.4 stress level on a scale of 1-10, higher than the American average of 4.9.
millennials, retirement, plan, price, now, later
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2017-28-06
Wednesday, 06 September 2017 09:28 AM
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