Millennials to retire later than average
The millennial generation is now projected to work until age 75, according to a recent study by NerdWallet.
Reasons for the older retirement age include increasing student loan debt, an 11 percent raise in cost of rent nationwide and millennials’ approach to money management and saving, according to personal finance advice site, NerdWallet.
This year, the Retirement Report calculated that the new retirement age is more than a decade older than the current average retirement age of 62.
Junior Madi Krueger said there’s absolutely no way she could be saving for retirement right now.
“Right now I’m just doing my best to graduate with the least amount of debt as possible because that’s going to affect me in the next few years,” Krueger said.
She’s not alone. The average student graduates with $35,051 in debt, according to an analysis by Mark Kantrowitz, the publisher of Edvisors.com.
The average starting wage of students who graduated college in 2014 was $45,478, according to The National Association of Colleges and Employers.
Western’s Debt Counselor Mary Nichols said one of the best ways to handle student debt is to work during college.
“It can seem a lot harder to work in the beginning, but when you get out, that’s when you really reap the benefit because then you’re not in debt up to your eyeballs,” Nichols said.
Nearly 80 percent of students work part-time or full-time jobs while in school, according to a study by Citigroup. The average student works 19 hours a week during the school year to avoid more debt.
Senior Grace Miller said she would rather work a job she doesn’t love if it provides good financial opportunities.
“[If you’re able to retire earlier], your life won’t be your job and you can experience things outside of that,” Miller said.
With the Social Security Administration’s life expectancy estimate being about 85 years old, millennial’s are estimated to have about nine years of retirement.
One difference between the baby boomer generation and the millennial generation is college-aged people are not willing to invest in the stock market, Nichols said.
Many students are weary of the stock market because of how much the millennial generation has been through with fluctuation, Krueger said.
Krueger wants to invest in the stock market at some point, she said, but right now she wouldn’t know where to start.
When someone starts to save in their early 20s it makes a huge difference, Nichols said. It’s the only way to pay loans, have something to invest and avoid deep debt.
Nichols said she has seen many students who are surprised at how much they owe in student loans. She gives tips to students for avoiding getting buried in loans and retiring late such as working while in school.
“Subsidize your expenses by at least having a part -time job. Know what you’re spending as far as what you need for tuition and what you need to live on,” Nichols said.
Nichols encourages students to make an appointment with the Student Business Office to become educated and financially literate. Another option is to go to the Career Center to get tips on retirement plans and job choices after graduation.