Generation Y Isn’t Doing So Well With Retirement Saving
10 October 2006Even gimmicks, clever advertising, and common sense don’t seem to be able to convince people in this age group to save. Yahoo has the details:
It’s no small feat getting young people — worried more about student loans, credit-card debt and Saturday night — to save for retirement. Only about a third of those in the 21-to-30-year-old group contribute to their 401(k) plans, according to the Employee Benefits Research Institute, a Washington, D.C., think tank. Now, through quirky marketing campaigns featuring pizza parties, iPod promotions and even fake letters from parents, the industry is trying to get Generation Y to think about tomorrow.
When tens of millions spent in marketing don’t do anything, there’s a big problem. My guess is that it’s a fair assumption that the two-thirds of people who don’t contribute to their 401(k)’s in this age group aren’t saving anything, period - if they are, they need some education on tax law. I’ll also bet that most of the people who do contribute to their 401(k)’s aren’t putting in that much. Which is sad, frankly, because you don’t have to save all that much if you start in your twenties. That’s the “easy retirement” decade - start in your thirties, and it’s “rough, but doable.” In your forties, it’s “this will be a complete pain in the rear.” If you wait until your fifties, like most people, it’s sudden panic. So if you understand compound interest, and know someone in their twenties, it might be a good idea to sit down and explain it to them. You’ll save them a load of heartache down the road if they actually listen to you. I’m not holding out hope - but everybody deserves a shot.
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2 Responses to “Generation Y Isn’t Doing So Well With Retirement Saving”
October 13th, 2006 at 12:25 pm
Education Finance Roundup…
This is a look at my favorite educational finance posts of the last two weeks….
October 15th, 2006 at 7:38 am
This generation, like most of America, buy into the advertising and slick gimicks of Hollywood, that says everyone buys a brand new car every couple of years and charge everything on their credit cards. When infact, a wise money spender will save for their car, and then keep it for 10 years or longer.
However, the problem doesn’t stop there, the article is more focused on how they are ignoring all the advertising to invest into their futures, even with the simplest of things as their companies 401k. Like him, I would say it is a fair assumption, that if they aren’t saving in their companies retirement plan, then they probably aren’t saving anything. Which brings me back to their spending habits, they are spending way more then they earn and if they don’t curb their spending they will end up spending retirement eating crackers and Alpo.