Getting on Track to Hit a Million
Published on September 20, 2016
No, we’re not taking about the lottery here. We’re talking about retirement savings. Many millennials believe they won’t hit a million dollars in savings by retirement. In fact, a study done by Wells Fargo showed that 64% of millennials surveyed think they will not hit that million dollar mark. About 41% of millennials have not started to save for retirement yet because they are either paying off their debt, or feel they do not make enough money to get started. A whopping 34% of millennials have an average debt balance of $19,978 and many of them are finding this debt to be holding them back from saving as much as they would like to.
Many millennials have a very realistic approach when it comes to their retirement. About 66% believe that retirees should be responsible for their own financial support, and roughly 75% believe that Social Security will not be around when the time comes for them to retire (You can read more about that here). Millennials understand the importance of taking advantage of their employer-provided 401k plans, but too few millennial employees actually have them – roughly 52%.
It’s easy to see why many millennials might feel discouraged about their future retirement. More than half of millennials (52%) are nervous about investing because of the volatility they have witnessed within the stock market. This Harris Poll from March of 2016 explains how 79% of millennials are not investing in stocks because of this fear of volatility. With half of millennials nervous about stocks, and over three quarters of millennials not investing in stocks at all, how can they get on track to hit a million in retirement savings?
The Mark: How to Hit it
According to Wells Fargo, many millennials could be on their way to hitting the million dollar mark by retirement without even knowing it. The median salary for millennials is $27,900 and about 44% are putting away more than 5% of their income for retirement.
There are many options available to millennials who wish to start their retirement nest egg. A popular option is a Roth IRA. These allow your contributions and investment earnings to grow tax free, as you have already paid taxes on the funds that have entered the account. Another bonus of having a Roth IRA is when you take the money out of that account while in retirement you don’t have to pay taxes on it. If you’re interested in opening a Roth IRA, here is how easy it is.
Once you open a self-directed IRA, you can invest as little or as much as you would like into a multitude of investment types. You can read more about that here and here.
Need some education about self-direction as a retirement strategy? Our website has load of helpful information to get you started and in the know, and the helpful professionals at Next Generation Trust Services will answer your questions and handle your transactions with expertise and efficiency. Contact our office at Info@NextGenerationTrust.com or 888.857.8058.
Want to know more? Check out this link or watch our informative videos. You can also download our free white paper that gives you the inside scoop on how to use self-direction to build your retirement nest egg, using nontraditional investments you already know and understand.