Millennials Choose Cash—And Why That’s Not So GreatJanuary 26, 2018
Bram Stoker meets the Bond MarketFebruary 23, 2018
By Mandi Woodruff
Courtesy of Yahoo Finance
Full Article here
Cliff Notes (C’mon its 13 bullet points you can read this):
- 20 somethings don’t save money for two reasons:
- “There are bills to pay, debt to be tackled, apartments to rent, and social lives to be had.”
- They think that their money is better served in their pockets now.
- Due to inflation, a 20 something will need $7,000,000 at retirement!A 25 year old making $50,000 would need to save 14.65% of their salary througout their career.
- In 1970, someone could have retired with just $166,000.
- Today, someone needs around $1,000,000.
- TIME IS ON YOUR SIDE!
- Saving 6% of your pay at 25 is much more valuable than saving 8% at 55.
- Case Study:IF you decide to invest while you are younger you stand to have a significant amount more at retirement and “people who do that earlier set themselves up much better for success.”
- Jennifer, 22, making $3,000 a month, saves 5% of her salary in a 401(k) with a 5% employer match ($300 a month). She earns 6% at year on her investment and ends up with $753,849 at age 65. (assuming she never increases her contribution or gets a raise)
- Jennifer decides not to invest young, instead she waits till she moves up in the company and is making $6,000 a month ($600 a month) but is now 35. Same savings of 5% with 5% match and same investment, at 65 she has $317,843. She lost out on $436,000 by waiting!!!
*Note: We do not own Cliff Notes or have any relation with them with are just using them as an example of a book synopsis company.