Planning While Young
- Younger generations are forgoing saving for retirement in their youth, for experiences
- Your contributions', your employers' contributions, and the overall state of the market, compound to create a desirable outcome for those that invest responsibly and consistently
The words of a financial advisor veteran, and titan of her industry: "you want to play and have fun,
that's on you later on in life when you can't pay your bills."
We are attempting to conceal our cackles at Suze Orman's candor in her most recent MoneyWise interview, following Bank of America's latest poll stating younger generations are forgoing saving for retirement in their youth, for experiences.
Because she is entirely right, as money is an extension of your inherent freedoms, "you do you" reigns True; it is entirely on the individual to decide their fate. But there's no such thing as a free lunch, every choice has a cost.
Orianna Rosa Royle even did the math for Gen Z and Millennials, "depositing a monthly investment of $100 into an account with a 12% yield would net someone approximately $1,188,342 in 40 years' time." And for the younger end of Gen Z, in 40 years they still will not have even reached the current minimum retirement age.
In 2023 alone, the number of 401(k) millionaires has grown over 25%; in 2022, the same Fidelity research saw a 32% decrease in 401(k) millionaires due to the stock market downturn, but that also coincides with the 36% increase Bank of America saw in hardship withdrawals in Q2 2022.
Likewise, the professions resulting in million-dollar balances by the time their beneficiaries retire? Teachers, engineers, accountants - workers that have stable and long-term employment with access to a retirement plan. Your contributions', your employers' contributions, and the overall state of the market, compound to create a desirable outcome for those that invest responsibly and consistently.
What goes down must go back up, and so the business cycle goes; what matters is presence and participation over the long-term. Plan accordingly while your mind and body are still sharp, nothing lasts forever, least of all youth.
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