Millennials and Their Retirement
Millennials, the generation encompassing young adults aged between 20 and 35 who are transitioning into adulthood, need to start saving for their retirement early on to enjoy a comfortable post-work life. Sixty-three percent report starting to save for retirement before the age of 25; however, less than a third are saving at least 10% of their income through their employer’s retirement plan.
A recent gathering of millennials in the United States revealed insights into their feelings about planning and preparing for retirement, the specific steps they’re taking to reach this goal, and whether their efforts are sufficient. They expressed the struggle of balancing retirement planning with other time and financial demands. Most haven’t calculated the savings they should aim for, but all agreed they’re not doing enough.
According to a study, 83% of millennials are maximizing the contributions made by their employers to their retirement plans.
Retirement vs. Everything Else
The top three budget items for millennials are mortgage/rent (65%), food (38%), and car/transport (30%). Other essential expenses include utilities (27%), student loans (20%), and credit card debt (16%). These significant expenditures are seen as primary barriers to saving for retirement.
Investing in Visualizing Your Future
The journey to a comfortable retirement begins with envisioning how you want to spend your old age. Focus on key factors like your current health, diet, and daily activities to project your future self. Like a healthy diet and exercise routine, proper financial management can contribute to a better quality of life in old age. Consider the income you’d like to have in retirement, ensuring it not only covers basic needs but also unforeseen health-related expenses.
Do You Know Who Manages Your AFORE Account?
Regardless of affiliation with IMSS or ISSSTE, you can have an AFORE account. With many millennials freelancing, retirement planning should still be a priority. Research the AFORES available in the market, compare historical yields and commission fees, and choose one that fits your needs.
Financial Independence? It’s Possible!
Six in ten millennials aim to be in a better financial position than their parents. However, some still rely on their parents to cover expenses like cell phone bills, car insurance, health insurance, and rent/mortgage. INEGI reports that millennials make up 46% of the population in Mexico, with 51% of working millennials earning up to $7,952 per month and only 4% earning over $13,254 monthly. According to CONSAR, estimated pension savings for IMSS-affiliated workers aged 36 or younger average at $434,714 by age 65 – insufficient to cover their remaining years.
Millennials face a more challenging landscape than previous generations but can still change these projections. If you’re looking to develop a strategy for enhanced financial freedom, HEDEKER Group can provide all the necessary tools to meet your objectives easily and conveniently.
