Top 5 Millennial Retirement Savings Tips
Today, there are several new innovative millennial retirement savings tools and best practices that have been fueled by the tech boom to help us improve habits and encourage saving. While each person’s finances vary and the pandemic has shifted priorities, there are ways to adjust day-to-day living to help us reach our financial retirement goals
Millennials have had it rough when it comes to saving in general, but can you blame us? We have student debt and began careers in a tough job market that followed the Great Recession.
A 2019 study by the Center for Retirement Research at Boston College suggests millennials have caught up in terms of labor market outcomes and life events. While reports suggest millennials are saving at the same rate as older generations did, factors like student debt, lower payouts from Social Security, smaller 401(k) balances, longer lifespans, and now the pandemic, attribute to saving challenges. Millennials are expected to save more to attain the same wealth as Generation X and baby boomers, and that’s just unfair.
An October report from the Transamerica Center for Retirement Studies found now with the pandemic, 43% of millennials have already withdrawn or were considering withdrawing from their retirement accounts. This is in comparison to 27% of Generation X and 11% of baby boomers.
That being said, the following tech tools and strategies have helped several millennials and myself, save day-to-day and work to achieve our dreams.
Apps For Millennial Retirement Savings
We are more connected to our phones than ever before. Discovering a savings app that fits your lifestyle is easy to do thanks to the release of several new apps in the last 10 years. From personal finance to credit score checks and investments, here are a few of my favorite millennial savings apps.
Browser Extensions For Millennial Savings
Shopping extensions are becoming increasingly popular particularly during lockdown while consumers in most states shop online. Browser extensions such as Honey, Ibotta, and Quidco offer a variety of consumer features that include coupon codes, price matching, and cash back notifications.
These extensions can offer millennial shoppers with simple ways to save on purchases and find the best value for their buck!
Investing in Smart Home Tech
Our home technology is becoming more intelligent by the second. There are plenty of ways to tap into these innovations to keep utility bills down. It requires a small investment but the benefits go a long way. This is particularly important for regions that have been affected by utility cost increases due to natural disasters or long winters.
Smart thermostats allow users to have complete control over the heat in a home. This reduces excess spend on energy, and ultimately saves money. Smart plugs offer total control as they can attach to outlets or directly to appliances such as TVs or air conditioners. Additionally, smart leak detectors and light bulbs offer added savings. Smart features such as remote control, automated scheduling, and voice assistance, provide the ability to reduce excess energy consumption to save money.
Cut Down on Dining Out
Millennials love dining out. We love brunches, happy hours, and trying new cuisines. Dining out is a part of our culture and offers a fun experience. But this can be costly in comparison to purchasing fresh ingredients to craft a homemade meal. Millennials are said to spend an average of $174 per month dining out. They are also more likely to splurge on a nice meal even if money is tight. To cut down on dining costs, try creating a fun cooking experience at home. Gather inspiration from new cookbooks or Instagram chefs to try something new.
Also, invest in a coffee machine! The average person spends $6 at Starbucks. If your daily habit is to stop at a coffee shop before heading into work, this adds up. It is significantly cheaper to buy a coffee machine, beans, creamer, or a thermal cup compared to purchasing a daily latte.
Millennial Retirement Savings Options
While retirement may seem distant for some, there are easy solutions you can implement today. Including solutions that provide peace of mind and support to achieve financial goals when you are ready. Retirement saving options to consider include:
- Defined Contribution Plans: A defined contribution plan includes a 401(k), which is widely used by employers but often complex and costly for small businesses, 403(b) plan is offered to employees at public schools and certain tax exempt organizations, and the 457(b) plan is widely available to state and local governments. Pros and cons exist for each retirement plan within a defined contribution. 401(k)’s are growing in popularity, particularly due to the increasing number of new 401k service providers offering bundled solutions for businesses with ease.
- IRA Plans: IRA’s come in all shapes and sizes, including the traditional IRA, Roth IRA, spousal IRA, rollover IRA, SEP IRA, and SIMPLE IRA. Individuals can often set up an IRA account through their bank. Depending on the investment style, you can find robo-advisors for a hands-off approach or a broker for a more hands-on approach.
- Solo/Individual 401(k) Plans: For self-employed or entrepreneurs without full-time employees, a Solo 401(k) makes sense. Solo 401(k)’s offer many of the same benefits as a traditional 401(k), but with a few differences including tax benefits, contribution levels, and limits.
On Your Way to Retirement
With these money saving tools and best practices, millennials can save more money and reach their goals faster. There is no ‘one strategy that fits all’, but with a little research, investment, and dedication you will be surprised by the amount you can save in just a few months.
I’d love to hear about the ways you’re saving! Drop a comment below to share in the wealth.
The post Tech Boom or Financial Doom: Millennial Retirement Savings appeared first on Grit Daily News.