Why Millennials Are Better at Retirement Than You Are

Why Millennials Are Better at Retirement Than You Are

Millennials have a rep for being slow to embrace adulthood.

But they’re showing an impressive maturity when it comes to at least one responsibility: saving for retirement.

On average, 23 is the age when Millennials start contributing to retirement accounts, according to a new survey from CoreData Research for Natixis Global Asset Management. That’s six years before Gen Xers took action—and a decade before baby boomers.

The Importance of an Early Savings Start

Why is retirement already on the Millennial brain at 23? They may realize that they bear the savings burden; they can’t rely on pensions like many boomers, and social security faces a potential shortfall.

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And, of course, there is a big benefit to this early bird approach. The sooner you begin saving, the more time your investments have to grow and benefit from compound interest.

Low Investing Confidence, Low Balances

While Millennials are off to a savings head start, the survey also had some not-so-good news. Only 50% of respondents (of all ages) feel confident about their investing knowledge and abilities.

And while respondents anticipate needing an average of $805,000 to fund a comfortable retirement, the average account balance is only $83,000.

Present-day money pressures aren’t helping either. Nearly four in 10 of the CoreData survey respondents admit to borrowing from their retirement accounts—often to deal with an emergency or make a down payment on a home.

The Retirement Outlook for Generation Z …

Even with their earlier savings, the youngest Millennials and up-and-coming Gen Z are facing an uphill retirement battle.

According to NerdWallet’s 2015 New Grad Retirement Report, 75 is the new 62.

In other words, a 23-year-old today will need to work 13 extra years to be financially prepared to retire (currently, 62 is the national average retirement age).

NerdWallet analysts cite hefty student loans as a factor, along with the tendency of young folks to rent, which means they miss out on the tax deductions and equity that can come with home ownership.

Still, forewarned is forearmed, right?

Whatever your demo, if you're feeling inspired to take action, check out these five ways to retrain your brain to save more for retirement.

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