Retirement for Today’s College Grads
Today’s college graduates are projected to retire 13 years later than today’s retirees.
Certified Financial Planner Carina Diamond of SS&G Wealth Management suggests a three-pronged approach to younger clients: Cut debt, invest more and make sure you have an emergency fund.
Why is this happening?
Yes college grads get that expensive piece of paper that allowed them to further their knowledge and broaden their horizons, but for some it comes with years of debt and suffocating payments. According to NerdWallet, the average college grad will spend $4,239 a year repaying their debts. In addition to their debts (and possibly because of them) twenty-somethings are spending a longer period of time renting than previous generations. Purchasing a home allows for many tax-deductions as well as home equity which can greatly benefit the purchaser.
How can you combat this?
Living at home for a while can greatly benefit you, especially if your parents are allowing you to stay rent-free. Living with family until you are 25 allows for a possible retirement at age 70 instead of 75. Also, investing is key for young people, and not at a slow pace. Invest a majority of your assets in stocks rather than keeping cash on hand. Don’t let your parents’ financial hard-times due to the credit-crisis of the last decade be an indicator for your investments.
For the young adult generation, it is time to start a retirement savings plan. For most, this begins in the workplace with a 401(k). Individual retirement accounts (IRAs) are also great, because they can be operated outside of employment. Traditional IRAs are funded by pre-tax money and Roth IRAs are funded after-tax.
The most important thing for college grads today is to have a financial plan. These days, this is a fairly easy task as there are even robo-advisers that will manage your investments for you using an automated algorithm-based financial planned method. Of course, it is always beneficial to have face to face connections, so it is worthwhile to pay for even an hour with a fee-based financial planner that can make sure you haven’t overlooked anything important.
Follow Parc Forêt on Facebook, Twitter, Pinterest and Instagram to stay up to date on all things retirement, as well as Montrêux events and the Reno-Tahoe area!
For real estate inquiries, stop by the beautiful Montrêux Welcome Center at 16475 Bordeaux Dr. in Reno, NV or call us at 775.849.9444. The Welcome Center is open 7 days a week, from 9:00 am – 5:00 pm.
