A recent study from the Transamerica Center for Retirement Studies found that the median retirement savings for millennials is $31,000.1 That amount may be a good start, especially if you’re just starting your career. However, given the challenges millennials will face in retirement, you’ll likely have to save a substantial amount over the remainder of your working years.
Millennials will face a number of difficult challenges. The first is simply life expectancy. People are living longer than ever, and life expectancy will only continue to increase as medical treatments evolve and advance. If you retire at traditional retirement age, it’s possible that you could live in retirement for 30 or even 40 years.
Are you one of the millions of Americans struggling with student loan debt? According to statistics from the Federal Reserve, Americans owe more than $1.4 trillion in student loan debt. That’s nearly double the aggregate credit card balance. More than 40 percent of Americans have student loans, and 11 percent of them are in delinquent status on those obligations.1
If you’re dealing with student loans, retirement may not seem like a high priority. That’s especially true if you’re decades away from retirement. You might feel urgency to pay off your student loans before you begin saving for the future.
Ignoring retirement could be a mistake, however. While retirement may be years away, that doesn’t make it any less of a priority. You may need to fund decades of living expenses in retirement. That kind of financial challenge requires a substantial amount of savings.