Mounting tuition costs, fewer jobs after graduation, and lower wages for available jobs – it’s no wonder most millennials have done little to develop their retirement savings, if at all.
The average 2014 college graduate takes $33,000 of student loan debt with them into the real world (Edvisors), and only 28 percent of Generation Y thinks that investing will make a significant financial impact (UBS).
Fortunately, two-thirds of this group also thinks they will do better than their parents did in achieving a better standard of living (Wells Fargo).
For the hopeful, here are four ways to work toward greater retirement savings:
- Workplace Retirement Plans – It’s worth the time to check out your company’s 401(k) or equivalent retirement savings plans. Often, the organization will match your contribution up to a certain percent. We recommend putting away at least the amount that will be matched, especially if you are just starting out with investments.
- Lower Interest Rates – See if you can get a lower interest rate on your federal student loans. The money you save can be directed toward retirement in an IRA or 401(k) plan, or in a similar fund that you set up with your financial advisor.
- Diversify Your Investments – While there are certainly stocks, bonds, and index funds that become ripe for the picking, you may be better off with a less risky approach. Consider talking with a retirement advisor who can select an appropriate menu of investments that fit your lifestyle.
- Create a Financial Plan – Working with a Certified Financial Planner (CFP) isn’t just for the 1 percent. The upfront cost of creating a plan can layout the path you should follow to pay off student loans, buy your first new car, save for your first house, and begin saving for your own children’s college. It has been said many times, “Those who fail to plan, plan to fail.” Those words ring painfully true when it comes to savings and retirement.
Taking these first steps toward retirement savings isn’t only beneficial for your financial health, but also for your mental health as you plan and prepare to retire on your own schedule.