The words “retirement planning” and “millennials” often aren’t found in the same sentence. However, financial planning is as important for millennials as it is for retirees. Someday, those millennials will be retirees.
But given their youth and the crushing student loans many have, how do you begin? They may be living on a diet of ramen noodles and coffee.
Do they even have enough money to put into savings? And what about financial planning fees?
As our title says, retirement planning for millennials doesn’t have to be hard. We’re sharing highlights from six millennials in the financial services industry who suggest ways to interest millennials in saving for retirement.
Making Retirement Planning Appealing
One of the first steps to get millennials to save for retirement is showing they can afford it. Most of us don’t realize where we spend our money until we go through it carefully. Dunkin Donuts here. Takeout pizza there. Seemingly small expenses add up.
In the same way, small contributions add up. Instead of going out, they can invite friends to stay in. A potluck dinner and TV movie provide affordable fun. Putting the money normally spent on a night out into retirement planning will pay dividends. Pun intended.
Automatic payroll deductions are another great way to save money. You can’t spend money you don’t have. It’s easy to start small and increase contributions over time millennials may realize they don’t notice the five or seven percent contribution missing from their pay.
Employers that offer a matching contribution to a retirement account are an attractive incentive. In a one-for-one match, the contribution doubles. Millennials basically get rewarded for saving for the future.
In the same way, showing a millennial how their investment will accumulate over time can win them over. The seven percent average return on a 401(k) means the contributions virtually double each decade. Contributing $10 today can equal $160 in 40 years. Multiply that by the number of pay periods or contributions in a year and you are talking about real money.
These are just a few of the ways to interest millennials in retirement planning. and invite you to download “Bridging the Gap” by Judy Ward for more details on this subject.
If you are or know a millennial who wants to learn to successfully save for their future, Keating Wealth Management can discuss their options.
We have offices in Glastonbury and West Hartford. Call Kevin Paro at (860) 479-3883 today to set up a time to discuss your retirement plans.