Retirement Planning: Strategies for Millennials and Gen Z

Introduction
You may be surprised that almost half of all Americans have less than $10,000 put away for retirement. It is an eye-opener that reveals how important financial planning is in one’s life, particularly among the youth. While our grandparents had this enviable position called pensions and predictable job security, how things have changed. The millennial generation faces record-high student loan debt burdens, combined with an unpredictable labour market. This makes retirement saving more critical than ever. Thankfully, the earlier you start, the better. By riding on the power of compound interest, you can set up a solid financial foundation and enjoy stress-free retirement. Let’s explore the Strategies for Millennials and Gen Z to help you achieve your retirement goals.

Why Retirement Planning Matters for Millennials and Gen Z
Millennials and the generation that follows them, Gen Z, face a financial terrain quite different from their forebears. For many, student loan debt has become a heavy burden, drastically impacting the availability of funds that may otherwise be diverted toward savings. Added to this is the fact that wages remain flat compared with growing expenses related to living, further exacerbating the difficulty of saving for retirement.

As the traditional concept of stable jobs and pensions slowly disappears and the gig economy contributes to uncertain income streams, it is all the more necessary that the young generation do more about retirement planning.

There are several reasons why saving early matters. First, compound interest enables small savings invested consistently to grow exponentially over time. Strategies for Millennials and Gen Z , Second, it develops the habit of saving early and creates financial discipline—a very useful virtue throughout one’s life. Lastly, starting early drastically increases your chances of securing a good retirement plan so you can enjoy your golden years without any stress.

How to Get Started: Retirement Planning Strategies
Knowing and understanding your personal situation is the first step to a sound and secure financial future. It starts with monitoring income and expenses, thereby painting a clear picture of your spending habits. Budgeting may be a bore, but it proves to be an effective means of identifying areas where you can cut down spending to apply more funds toward your savings.

Now that you know your income and expenses, you can start setting your retirement goals. Think about the kind of lifestyle you want to lead during retirement. Are you going to travel worldwide, downsize, or work part-time? All these are drivers of how much you’ll be saving. Estimate how much you should save using online calculators, given individual factors such as age, desired income, and how long one can expect to live.