Seventy percent of millennials think they will spend less than $36,000 per year in retirement expenditures.
Fifty-six percent believe they will not be able to retire when they want.
Half of millennials believe they will financially support their parents as they age.
48 percent would pick Warren Buffett to be their financial adviser, 32 percent would chose Oprah Winfrey.
Source: http://irionline.org/newsroom/newsroom-detail-view/IRI-millennial-study
Most college students aren’t saving for retirement, but one alumna began thinking about her future during her sophomore year of high school.
Only 29 percent of millenials are actively saving for retirement, according to a study from the Insured Retirement Institute, an association for the retirement income industry, and the Center for Generational Kinetics, an organization that researches influences on different generations.But having a safety net has always been important for Hayley Andrews.
Andrews majored in criminal justice and graduated May 2015. During high school, Andrews said her mom went into debt when she returned to college.
“What stood out most to me was that she dipped into her retirement and used it all, as well as any other savings she had,” Andrews said. “She ended up having to rebuild it, and I don't think she'll ever get to where she was, let alone a place where she can retire without having to work.”
Andrews’ parents divorced when she was 3 years old. Growing up, she said she has always saved money and her father was adamant about having funds set aside for emergencies.
Because of her mother’s financial troubles, Andrews wants to ensure financial stability for her future. She said it’s never too early to start planning.
“I never want to be in that position. As a result, I have done what I can to start saving now,” Andrews said. “The most important variable is time… retirement funds grow exponentially over time.”
Students tend to not plan ahead because retirement is in the distant future, and they feel optimistic about their health and their career, said Dan Boylan, an instructor of finance.
“There’s just an overall feeling of ‘Let’s live for right now and never worry about tomorrow,’” Boylan said. “Eventually when tomorrow comes there’s going to be a problem.”
Boylan said as soon as their college years are over and they enter the workforce, people should start saving for their future.
“My opinion is you would start thinking about retirement right when you graduate and get your first job,” Boylan said.
Finance instructor Matt Henry said the earlier students start planning for retirement, the better.
“One thing I tell people is get yourself in the habit of doing good things,” Henry said, “Find ways to do good things regularly, incorporate them into your lifetime.”
The study found millennials have unrealistic expectations when it comes to how much money they will spend. Seventy percent of millennials believe they will spend less than $36,000 a year, but the current national spending average for people ages 65 to 74 is nearly $46,000.
Henry said when people are in their early 20s, $36,000 seems like a lot of money. But once people reach age 30 or 40, they have major expenses such as housing and children.
As millennials begin to earn more money and progress in their career, they get used to having more money and finding ways to spend it, Henry said.
“I think everyone gets used to having that extra hundred dollars in their checking account then all of a sudden it becomes part of your normal routine to go out to eat once to twice more a week,” Henry said.
Boylan suggested two actions for students to take when they graduate and get their first job. He said to buy houses in areas that go up in value and to contribute the maximum to their 401k or 403b plans.
“If you did those two things, you’re going to be so much better off than anyone else,” Boylan said. “Reality is the more you do, the better off you’ll be.”
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