Yesterday, I wrote about five optimistic facts that demonstrate that Millennials are getting a great jumpstart on saving and investing. Those numbers undermine a lot of commonly held misconceptions the popular imagination has about us. Even when I started my research for my upcoming book I went in thinking the worst, but the numbers came out better than expected. Great job so far, Millennials!
But while those facts are cause for congratulations, there is more research from the Transamerica Center for Retirement Studies showing at least four problem areas that we can improve upon. As I’ll discuss more and more, as you grow into a DIY investor you will be equipped to avoid these less-than-ideal investing trends, which in turn will help you to build more long-term wealth, lower investing costs and grow your DIY finesse.
Here are four problem areas where Millennials will need to work on to improve retirement savings and investing:
- Millennials save 8% of annual salary in their 401(k) plans, which will not be enough savings to cover future retirement needs,
- 62% of Millennials are using some form of professionally managed services, leading to higher account expenses and lower investment returns over the long run,
- 20% have taken a loan or early withdrawal from their 401(k) plan, which impedes long term 401(k) growth and compounding, and
- $800,000 is the median amount Millennials believe they need in retirement, which is not enough to sustain a projected 20-30 year retirement.
My upcoming book will show you how to avoid all 4 problem areas and get you on or back on track. You’ll learn to save more of your annual income, invest confidently and competently on your own as a DIY investor without the need for a financial advisor, find ways to avoid taking loans (and other mistakes) from your 401(k) and know how much you will need to retire to sustain a 20-30 year retirement!
Stay tuned! To get this blog started, I’ll be taking inspiration from my upcoming book, From Millennial to Millionaire: DIY 401(k) – 5 Do-It-Yourself Steps for the Digital Generation to Design and Manage their 401(k), to write blog posts. My new book should be available in eBook and paperback on Amazon by summer 2017.