Student loan debt may be higher than it’s ever been, but millennials are worrying more about their financial futures than their financial pasts.
It turns out that young people are more stressed about retirement than paying off their student loans, according to a survey from investment group Charles Schwab. Almost 40 percent of millennials find saving for retirement a bigger financial stressor than their monthly expenses (29 percent), credit card debt (26 percent), and student loans (24 percent). This is despite the fact that young people have much more time to start saving than their Generation X and baby boomer friends.
But young people aren’t alone in their worries. Half of respondents say they feel it’s impossible to save for a “comfortable retirement,” even though 43 percent know how much money it’ll take.
With so many financial obligations to meet, Americans feel workplace benefits, like 401(k)s, are especially important.
“Ninety percent call the 401(k) a ‘must-have’ benefit and would think twice before accepting a job that didn’t offer one,” the survey says. However, “only half (51 percent) of respondents feel totally on top of their 401(k)” investments.
Even though it’s highly recommended to increase contributions as time passes, one-third of respondents haven’t followed suit. In fact, some admit they have lowered their contributions over the years. Most respondents, 85 percent, want a financial wellness plan from their employers.
“People look at retirement savings as part of their overall financial picture,” says Steve Anderson, president of Schwab Retirement Plan Services. “Employers are in a unique position to address the needs of their employees more holistically. An increasing number of employers now recognize that a workplace financial wellness program can not only help alleviate the financial stress employees feel, but it can also increase retention, loyalty and engagement.”
Save more before dying
With so many financial responsibilities, Americans are living longer than ever and that actually freaks them out. Most of us fear that we will outlive our savings and run out of money before we die. Most older Americans believe financial security was vital to achieving the American dream.
Don’t let other obligations stop you from saving money before you get old. Start right now — no matter how old you are! — with trying to save $100 a month. Even if you’re starting late, in your 50s you can make catch-up contributions to a 401(k) or an IRA. If you can’t find the extra cash to make contributions, look to downsize your home or sell things around the house that could earn you some money to stash away. Minimize taxes by picking the best retirement accounts for you, whether it’s traditional or Roth IRAs and 401(k)s.
If you’re still working, take advantage of that 401 (k) employer match if your job offers it. Work as long as you can. If you wait to file for Social Security until full retirement age, you can get an 8 percent bump in your benefits every year you wait to start getting them. If you’re young enough to move careers that pay a little more money, look for a new job! Always stay up-to-date on skills, certifications and training programs — especially if your job will cover the costs.