Young people may not have all the tools they need in their financial strategy to plan for their retirement, and this could hurt them in the future.
Approximately 70 percent of young people have yet to start saving for retirement, according to a report conducted by GfK for MainStreet.com. However, close to two-thirds of these people still think they will be able to retire by the time they turn 65 years of age.
Much of this is because of the younger generation’s planned dependence on Social Security benefits. The survey explained that this will be available for them when they plan to retire.
“As long as they are eligible, many Americans equate the date they retire with the date they file for Social Security,” Bill Meyer, co-founder of Social Security Solutions, told MainStreet.com. “Instead, retirees should separate those decisions and look at Social Security as if it’s another asset in their portfolio.”
Older Americans are still ensuring their financial security, which could be a method for younger people to model themselves after. The survey said that seven in 10 baby boomers explained they have a life insurance policy.
Another report suggested that there are retirement issues among many consumers. Only 35 percent of consumers explained they will be able to retire when they want, according to a report from PricewaterhouseCoopers. Nearly half of those polled noted their most significant concern regarding retirement is running out of money in their lifetime.
The youngest generation had a confidence level of 36 percent regarding their ability to retire, the report added. This was notably lower than those who were already at retirement age, as 44 percent noted they will be able to retire. The lowest category was those between the ages of 45 to 54, as less than 25 percent noted confidence in retirement ability.