Millennials: Our Minds on Our Money and Our Money on Our Minds

What are the top money concerns of Millennials?

According to Gallup’s most recent Economy and Personal Finance poll, the number one financial concern of young adults age 18 to 29 is paying college expenses and repaying college loans. The remaining top 5 concerns are lack of money/low wages, housing, paying off bills/credit cards/debt, and lack of employment.

Where do retirement savings rank on the list for this age group? All the way at number 9! Retirement savings does not even make the top 5 until the 50 to 64 year-old age group. Even then, it is still listed as the number 5 concern.

Why focus on retirement as a Millennial?

As a Millennial with many immediate wants and needs competing for your dollars, you may be wondering why retirement savings at this age could be so important. The answer is simple: compound interest.

Consider this scenario: three Millennials, all the same age, have not yet begun saving for retirement. As they progress through life, they begin contributing to a retirement plan at age 25, 35, and 45, respectively. Let’s say that they each are able to save $500/month until they retire in a portfolio averaging a return of 7%/year and that they each want to retire at age 65:

The chart says it all: saving earlier for retirement gives a clear and definite advantage over delaying. If the people who began saving at 35 and 45 wanted to have the same amount banked for retirement at 65 as the Millennial who began saving at 25, they would have needed to save about $1,070/month and $2,500/month, respectively. What a difference!

Welcome to Know Your Dough

Welcome to the iOme Challenge Blog: Know Your Dough! Here at iOme, we know that financial security and retirement aren’t generally exciting topics because of their complexity. We have decided to clear up the confusion and get you excited about your financial future by writing pieces that review the most recent research on retirement, discuss current retirement legislation, offer tips and tricks on saving for retirement, voice opinions of The Millennial Generation, and spark discussion on retirement topics all while keeping the information concise and understandable.

What do we ask of you? Take a read through. Respond to our posts. Start a discussion. Tell your friends! If you have any questions, have an idea for a topic, or would like to contribute a piece, send Allison an email at allison@iomechallenge.org. Financial security in retirement is an ever growing problem, but it can be resolved through shared knowledge and understanding. That being said, we encourage questions! Chances are, if you have a question, someone else has the same one and your courage in asking will help them, too!

Disclaimer: Our bloggers and contributors are not your personal financial advisors. Each person has different financial needs which require personal advice. We ask that you consult your financial advisors with questions that directly relate to your personal financial situation. Opinions represented in this blog do not represent the opinions of the members of the iOme Challenge board or our Blue Ribbon Panel.