30% of Millennials: We Aren’t Saving Enough for Retirement

By: James Flippin · November 02, 2022 · Reading Time: 3 minutes

Nurture the Nest Egg

We’ve been talking a lot about retirement lately. It’s an extremely important part of financial planning, because you can’t work forever. In order to eventually replace that income, it’s smart to save money now, and let it grow via compound interest.

The IRS just announced the maximum contributions that can be made to retirement accounts in 2023. Research shows many Americans fail to reach the maximum each year, while Goldman Sachs (GS) recently published a survey in which 34% of Millennial respondents said they feel as though their retirement savings are falling behind. Over 40% said this is due to financial hardship or the need to care for a child or older parent.

Why Is Financial Planning for Retirement Important?

Financial planning for retirement is important because you want to genuinely enjoy your life after work. Comfort and peace of mind are vital. Different types of retirement plans can help you secure a successful retirement. A financial plan for retirement is an evolving document that details your goals and objectives. An investment policy statement includes your time horizon, taxes, liquidity needs, legal matters; and unique aspects of your life are often included.

Each person’s situation is different. That’s why it is critical to customize a retirement plan for each individual; a cookie-cutter approach is rarely the optimal solution. Often it takes working with a fiduciary advisor to build, maintain, and execute a financial retirement plan.

Creating a Financial Plan for Retirement

Financial planning for retirement can seem like a challenging endeavor, but it starts with small steps. Simply investing up to the company match in your 401(k) plan and contributing to a Roth IRA are powerful first moves. As you accumulate wealth and as your life grows more complex, then reaching out to a certified financial planner (CFP)™ can go a long way toward crafting a solid financial plan for retirement.

Retirement income planning early in your financial journey is all about balancing realistic return expectations with the kind of lifestyle you want to live out during your golden years. It’s more than just investing, though. Ensuring that you have proper insurance and an estate plan in place is critical. Then as you near retirement, developing a Social Security and retirement account distribution strategy mindful of tax impacts is key.

You can start building your financial plan today by opening and investing in an IRA with SoFi. A Traditional IRA and Roth IRA are great tools to help grow your nest egg whether you are 25 or 55.

SoFi members also have access to financial planners to help you along your retirement journey.

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