SPRINGFIELD, Mass. (WWLP)– An alarming number of Americans won’t have enough money when it comes time to retire. 22News is working for you with what young Americans need to do now to financially prepare for their future.
For many young Americans saving for the future may be too daunting to think about, especially for those carrying student loan debt.
“That’s something that I need to pay off first before I can even think about owning a house and so retirement is just way on the back burner right now,” Jeremy Mckinstry, from Chicopee, told 22News.
Now, the Center for Retirement research, from Boston College, shows the need to start saving young is great as more than half of Americans households risk falling at least 10% short of the amount of money they will need during retirement.
Financial experts here in Springfield tell me while it’s never too early to start, a good time to get going on your retirement savings is when you get the job that offers you a 401K savings plan, especially if the companies offering to match what you put in.
But if your job doesn’t offer a 401K, financial expert Mark Teed, of Raymond James and Associates in Springfield, urges young people to do it on their own. Teed says to look at where your spending money and make adjustments, and to try starting with just 1% of your income.
“So if you make 30,000 dollars a year that’s only 300 hundred dollars a year of savings, so if you give up steak once a week for a couple months you’re going to create that income right there.”
His other advice, is if you start with 1% of your income, increase that by 1% each year, with the end goal to reach 15 percent. And at about age 35, try splitting what you save between the 401K and a Roth IRA savings plan. Teed said those are tax free later on and will give you more money to keep down the road.