Houston is a fun, trendy city with an awesome culture and an exciting vibe. It is home to many attractions and conveniences that make it a desirable place for millennials to live. In addition, Houston has a thriving job market combined with a cost of living that is slightly lower than the national average, making it an even better option for a place to call home. However, despite all this, millennials are still finding it challenging to plan for their retirement. Why? Here are a few of the challenges that Millennials face, and what to do about them.
1. Lack of Urgency
When you’re in your 20s, it’s so easy to just shut the thought of retirement out of your mind and say, “I’ll cross that bridge when I come to it.” Retirement feels so far off in the future that it doesn’t seem like a priority to start saving for the stage of your life when you’re 65 or 70. However, millennials who are proactive now will be in the best shape when they get to their golden years.
How to build your sense of urgency
If you’re in your 20s and want a good dose of motivation and urgency to start socking away part of your income for retirement, try these two techniques:
- Take a close look at compound interest calculators, and compare the difference of how much money you can accumulate when you start saving now versus age 30 or 35.
- Take a close look at the challenges of living on a fixed income. Get to know a senior in your community personally, especially someone who is in low-income housing, and ask yourself if that’s what you want for your own older years.
2. Lack of Income
A college degree simply doesn’t mean as much as it used to. In 1975, according to the US Census Bureau, the mean (average) income for people who had 4 years or more of college was $21,645. That translates to $98.483 in 2017 dollars, which provides significantly more purchasing power than the income of the typical college graduate today.
That means that as a millennial, if you are going to save successfully for your retirement, you are going to not only possess a sense of urgency and focus on prioritizing your retirement; you are also going to have to be more creative than your parents were in order to find the money to invest in the first place. However, you’ll thank yourself later when you retire and stay retired.
What to do about it
- Hustle. If your income is currently at a level where you’re barely squeaking by to cover basic expenses, there simply isn’t space for you to coast. Tap into your enterprising, ambitious, optimistic side and do what it takes to get a raise or a better job.
- Be creative. Increasing numbers of millennials are taking on a side gig to supplement their income.
- Avoid debt. Do what you can do to be frugal and refrain from taking on debt wherever possible, particularly credit card debt.
It’s not too early to start your retirement income planning journey. Contact Matt Nelson and the team at Income for Life. Will you be able to retire—and stay retired? Let us show you the way. Contact us today to get started.