Today’s graduates could retire as late as 75.
High student debt, skyrocketing rents and poor investment choices among Millennials are all conspiring to push back their expected retirement age to 75 (13 years later than today’s average of 62). Analysis from NerdWallet, a financial information website, suggests that today’s 23-year-olds can look forward to a measly 9-year retirement, on average, since they can expect to live until around 84.
The website PLANSPONSOR took a close look at the data (“Millennials Could Face Late Retirement,” October 2015):
On TIAA’s Starting Out website, personal finance expert Paula Pant identifies “The Top 10 Mistakes Millennials Make With Their Money”. Here are some mistakes made by 20-somethings that could be sowing the seeds for a delayed retirement:
Now the good news: Millennials have time on their side, with four or five decades ahead of them before retirement. Some even have the luxury of living with mom and dad while paying off their student debts and thinking about where to invest their money wisely. The best place to start is with a company retirement plan. However small their salary or big their other commitments, it’s absolutely crucial that young employees take full advantage of every employer-matched dollar. Walking away from free money is never smart, especially when compound interest can work its magic over four or so decades and turn that money into a sizeable nest egg.