Retirement savings need plenty of time to grow, and younger people appear to be taking this to heart
, where money saved generates interest on itself. The more years this process has to work, the more savings will grow.
Personal Capital's data looked at over 40,000 linked retirement accounts from millennials. With the median balance for 20-somethings at $34,006 and more than 30 years before retirement age, millennials' retirement plans are well on track. "If you waited an extra 10 years to start saving for retirement, you could be missing out on over half of the possible savings," Amy Oulette, a financial planner and the director of retirement services for Betterment and Betterment for Business, previously told Business Insider. Saving sooner rather than later can help.While millennials are doing well with their saving, the older generations seem to have slowed down, and this might leave them with less than they thought in retirement.
Even for a couple who shares living expenses on two retirement accounts, the combined amount falls over $330,000 short of the amount they'd need to live on $65,000 per year.. And, estimates on healthcare costs from Vanguard project that a typical 65-year-old retired couple will spend $197,000 in healthcare expenses alone during their retirement, or just about 30% of what the typical 60-something has saved.
According to a survey by Charles Schwab conducted in 2019, the average American felt that they'd need to. But, getting to that point is harder than it sounds. While we can't draw conclusions from millennials' and boomers' respective balances, we can look at these numbers through the lens of someone who eventually wants to retire: Retirement is expensive. Start saving now.
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