Only 30 years to go. Will millennials be ready for retirement?


The oldest members of the millennial generation turned 35 this year. That means those who want leave the workforce at the traditional retirement age of 65 have 30 years left to prepare for retirement.

That may seem like a lot of time, but some millennials might need to meet their retirement goals sooner. According to a survey of 2,000 adults by the Million Dollar Round Table, millennials cite an average age of 62 as when they want to retire. However, getting there could be hard, as 91 percent of surveyed millennials say they don't even have a retirement plan yet.

Many millennials entered the workforce at a time when higher unemployment resulted in more competition for jobs with lower salaries. "Coming out of graduate school, we hit the great recession," says Steve Seigel, a 33-year-old millennial, former investment banker and member of the advisory board for home care tech firm Honor. Cash-strapped millennials carrying heavy student loan debt may not have had the reserves to devote to retirement savings early in their career, but finance professionals say it's not too late to start now.

"At 35 years old, you're still really young," says Bob Gavlak, a millennial and wealth advisor with Strategic Wealth Partners in Columbus, Ohio. However, he cautions against using age as a reason to procrastinate. "You don't want to get to the point where you're behind the eight ball and now just kicking the can down the road."

[See: 10 Retirement Planning Moves to Make in Your 20s.]

Millennials have other priorities. Millennials have diverged from previous generations in many ways. They marry later, buy their first house later and, according to some finance professionals, begin saving for retirement later. "Professionally, I do not see nearly as many millennials come through my door as I would like to," says Darrell Smith, a millennial and financial consultant for Citizens Bank. It can be tempting for millennials to think retirement is a distant event that will sort itself out by the time they get there.

Plus, many young adults have the immediate concern of paying off their student loans. "A lot of kids are coming out with $30,000, $40,000 or even $100,000 in student loan debt," says Brian Heckert, author of "401(k)nowhow: An Insider's Guide to Retirement Plan Options" and immediate past president of the Million Dollar Round Table. "It's holding them back about 10 years [compared to] my generation."

Millennials may be digging out of debt, but Gavlak argues being debt-free shouldn't come at the cost of other financial goals. "You need to balance the desire to pay those off with starting to put some aside for the long-term and retirement," he says.

[See: How to Save for Retirement on Less Than $40,000 Per Year.]

Don't overreact, but action is needed. Smith is concerned about older millennials who haven't started saving for retirement. "I don't know that I would take it quite to the extent of saying freaking out, but there should be urgency," Smith says. Saving a small amount early in your career can dramatically impact your retirement finances. Money invested today will have more time to grow and compound, making it important to start saving as soon as possible.

Before they can start investing, Smith says millennials should make sure they have a cash reserve for emergencies and insurance for risk-management. Otherwise, they may end up in a situation in which they need to pull money from retirement funds to weather a financial storm, which could result in significant taxes and penalties.

[See: 10 Painless Ways to Save More for Retirement.]

How millennials can invest easily. Once those safeguards are in place, it's time to start investing for retirement. Gavlak says the most obvious place to save is in a 401(k) plan that offers an employer match. "I say this like it should be a no-brainer, but it's surprising how many people don't do it," he says. Getting a company match can be an easy way to quickly boost the balance in a retirement account.

Beyond that, Seigel sees millennials finding innovative ways to save money for retirement or other long-term goals. "I look at millennials, and it's a really engaged and smart demographic," he says. Rather than approach retirement savings in the same way as generations past, young adults are looking for simple ways to put money aside automatically.

Seigel uses the Acorns app to round up purchase prices and deposit the change into an investment account. Betterment is another startup website that offers tools geared toward younger savers. "A lot of these platforms are created by millennials," Seigel says, adding that they serve less affluent people who are often locked out of traditional wealth management firms.

Millennials may feel like they have all the time in the world before hitting retirement, but those years could pass quickly. Just ask the baby boomers who are now in their 60s.

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