Common sense would suggest older workers have a much easier time saving than young adults. They are more likely to have already purchased a home, put kids through college and, by that point, are putting more money away for retirement.

A recent study by the Transamerica Center for Retirement Studies confirms this is true, but the difference isn’t as big as you might expect. The report shows 78% of baby boomers are saving for retirement, compared to 77% of Generation X and 71% of millennials. The numbers may be skewed by the fact that some baby boomers have already retired, but a 70-plus percent savings rate is pretty impressive for younger generations.1

The message appears to be getting through: Americans need to save more for retirement. It’s heartening to see younger adults making this a priority, especially since many are also saddled with college student loan payments. Regardless of what life stage you’re in, saving regularly is an important habit. If you’re wondering which types of savings or investment vehicles are appropriate for your particular circumstances, we can help. Please give us a call to schedule a consultation.

Another reason the millennial generation may be saving more is that they’ve been squeezed out of the market for buying a house.2 Home values have increased significantly in certain areas of the country, giving some potential first-time homebuyers time to focus their resources on getting out of debt and saving and investing for retirement. This could be a silver lining when you consider the advantages of compounding interest over many decades.

However, millennials aren’t the only ones juggling debt. Americans over age 60 have amassed a total debt of more than $3 trillion, mostly on mortgages. But this generation also owes nearly $100 billion on student loans,3 suggesting people close to or in retirement are co-signing loans for children or grandchildren, or even paying off loans on their own education later in life.

Note that one of the provisions included in the SECURE Act, passed in late 2019, allows for withdrawals up to $10,000 from college savings 529 plans to help repay student loans.4

Fresno Financial Advisor Takeaways

Fresno portfolio advisor – Soutas Financial appreciated these points: Common sense would suggest older workers have a much easier time saving than young adults. The message appears to be getting through: Americans need to save more for retirement. Another reason the millennial generation may be saving more is that they’ve been squeezed out of the market for buying a house.2 However, millennials aren’t the only ones juggling debt. Americans over age 60 have amassed a total debt of more than $3 trillion, mostly on mortgages. But this generation also owes nearly $100 billion on student loans,3 suggesting people close to or in retirement are co-signing loans for children or grandchildren, or even paying off loans on their own education later in life. Regardless of what life stage you’re in, saving regularly is an important habit.

Soutas Financial & Insurance Solutions Inc. your Fresno retirement planning advisor is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment products such as trusts, probates, charitable giving, estate planning, or tax-efficient strategies, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!

Content prepared by Kara Stefan Communications.

1 Transamerica Center for Retirement Studies. Dec. 19, 2019. “19th Annual Transamerica Retirement Survey.” https://transamericacenter.org/retirement-research/19th-annual-retirement-survey#compendium. Accessed Jan. 9, 2020.

2 Lindsay Walker. Cronkite News. Jan. 8, 2020. “Despite slight uptick, millennials still face homeownership challenges.” https://cronkitenews.azpbs.org/2020/01/08/despite-slight-uptick-millennials-still-face-homeownership-challenges/. Accessed Jan. 9, 2020.

3 Angela Antonelli. Dec. 26, 2019. “When it comes to financial angst, boomers and millennials have more in common than they think.” https://www.marketwatch.com/story/when-it-comes-to-financial-angst-boomers-and-millennials-have-more-in-common-than-they-think-2019-12-24. Accessed Jan. 9, 2020.

4 Fidelity. Jan. 2, 2020. “The SECURE Act and you.” https://www.fidelity.com/learning-center/personal-finance/retirement/understanding-the-secure-act-and-retirement. Accessed Jan. 9, 2020.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

1063805C