In recent years, several reports have pointed out something interesting and even worrying about millennials and their relationship with retirement. Indeed, today’s adults born between the 1980s and 2000s are finding it difficult to save money and secure their old age rest.

Relative to previous generations, in older studies, millennials have lagged behind when it comes to preparing for retirement. The status of this generation in relation to the previous ones was as follows:

However, the factor that drew the most attention was the lack of financial preparation for retirement. Also according to studies, the net wealth/lower income ratio was lower than in previous generations. This could mean that millennials not only made less money, but saved even less.

However, in 2021, Angie Chen and Alicia Munnell, researchers at the Center for Retirement Research, updated this view. Apparently, millennials who arrived between 20 and 30 years old have already reached interesting levels in the factors studied.

However, the problem of saving for retirement seems to persist. What is behind this phenomenon? Keep following this article and understand.

In fact, there are at least three reasons why this generation doesn’t/can’t save. Below, we highlight each of them:

In fact, millennials were the generation that most sat on college benches. However, in the country, this training does not happen for free. The vast majority of college students have some type of loan to finance college. Most of these loans exempt the student from billing during college.

However, once graduated, the student already needs to pay the installments of his student loan. Therein lies a big problem. According to Chan’s research, 40% of students use more than 40% of their budget to pay off their monthly loans. This expense limits income so much that it is difficult to save money.

As the career of millennials progresses, it is hoped that they will finally be able to save. However, we still don’t know if this will happen in the future.

A 2019 TD Ameritrade report got another answer to the question, “why don’t millennials save money for retirement?”. 37% of adults aged 23-38 surveyed responded that rent expenses are what hold them back. Also according to the study, 1 in 5 people of this generation spends about 60% of their budget on housing.

The number is really scary! In addition, as the Fed continues to implement its actions this year, the tendency is for the price of rents to rise even more.

Fidelity Investment’s 2022 retirement plan revealed a very important fact about millennial emotions. Of the adults aged 18 to 35 interviewed, 45% responded that they do not feel motivated to save. In fact, the main reason is, “why save for a future we don’t know will come?”

Behind statements like this, we can measure the emotional impact generated by the pandemic and recent military events. In addition to these factors, the degradation of the environment has also led some millennia to become skeptical about the future.

Millennials’ lack of preparedness for retirement is actually a national problem. If they are not prepared, they will depend on state aid, as they have a much longer life. Thus, in the future, the budget for social security may become insufficient. In this way, the retiree would pay less to each person or stop serving many citizens.

In fact, the best way out, at least the one that is under our control, is to prepare a reserve to enjoy old age. So, here are some tips that might be very important for you:

Simply, take a survey of your monthly expenses and bills. Try to reduce them and see how much you can save without compromising your bills. Okay, next month, before you do anything with your money, set aside that amount and save. If you don’t know what to do, start using the following template:

If you don’t know where to invest your money, seek expert advice. In fact, there are very solid investment options in the stock market that can bring good returns. However, always remember to reinvest the profits you make.

As the rental price is so high, there is nothing better than sharing this expense with someone. So, look for a friend you trust and know that he won’t be late with the payment.

It is possible to have financial health throughout life. However, for that, you need to invest in financial planning now! Click the link below for the 4 best financial advice you could read.