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Retirement Planning

How millennials are saving for retirement

Experts doubt that retirement for the millennial generation will look much like traditional retirement. Still there are a few basic tenets to stay on track.
Traditional retirement planning today may not apply to a millennial's needs. For millennials, retirement may be a somewhat nebulous concept. Millennials are more likely to work at a job they love, and some never plan to “retire” in the traditional sense, as long as they are still physically capable of working.1 Here are just a few of the ways millennials are saving for retirement, in whatever future shape or form it may come in.

Make the most of 401k plans.

If you feel your retirement planning is lagging behind, spend some quality time with your company's HR representative, and find out how you can maximize your company's 401k plan or IRA offerings. Does your company match your contributions to a certain percentage? When are you considered fully vested? Could you scale back on everyday luxuries in an effort to put a little more aside for the future each month? Are there additional retirement investment opportunities or offerings that you're missing out on?

Aim for financial independence.

In his article in Money magazine called, “Forget About Retirement Planning for Millennials”, Alan Moore stresses that many millennials are geared towards gaining financial independence, rather than saving for retirement in the traditional sense. Financial independence is, in Moore's words, “a situation where an individual can generate enough income to pay all expenses for the rest of his or her life.”

If you're financially independent, you're free to work when and if you feel like it. You'll also have plenty of time (and probably money) to devote to the projects you love, regardless of whether they're big money makers or not. Planning for financial independence takes various forms - there are high-risk, high-reward strategies like starting and selling a business, or investing in real estate that will generate income for you sooner rather than later. There are also more practical methods such as running a side business in addition to your full-time job to sock away money for later, and more extreme methods such as investing a big chunk of your income so that you can technically “retire” early.

Get fully insured.

In addition to saving for retirement, millennials want to prepare for the unexpected, just like Gen Xers, Baby Boomers, and every generation before them. Life insurance is especially affordable while you're young and relatively healthy, so if you're currently uninsured, find out how much life insurance you may need and plan accordingly. Even if you're still single and have no dependents, there are many advantages to locking into an affordable life insurance policy rate during this time in your life.





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