Dear Millennials ... It's Time to Embrace Retirement Planning

As Millennials move away from being the youngest working generation (soon to be replaced by Gen Z), they face unique concerns in the changing retirement landscape. Previous generations could rely on company pension plans and Social Security. However, Millennials face greater personal responsibility when it comes to strategizing retirement.

On the positive side, Millennials are the first generation with access to 401(k) benefits for most of their working careers, with many companies providing matching employee contributions. This is a great starting point. Our best advice—take full advantage of this free money and defer as much as possible.

Before understanding how much you’ll need, it’s important to develop a solid saving strategy. Ask yourself these questions to determine the best course of action for you:

1. What do I want my post-retirement years to look like?

   By answering this question, you’ll know what you need to do next. Perhaps you anticipate working well past retirement age because you’re passionate about what you do. Maybe you want flexibility throughout your career to both work and take time off as opportunities arise. Or, you’re focused on the first item on your bucket list—retiring by age 50.

    

2. What does a consistent savings plan look like?

   Consider discussing this with a financial professional. Many millennials think meeting with an advisor is something that happens only when you make a significant amount money. Not true. Insightful financial advice from an expert can help you design a long-term plan.

    

   The amount you designate for your retirement savings depends on your situation. Some people prefer to dip their toe into the pool before jumping in. Others want to embrace it wholly. Eventually, you want to save 10–15% of your income for retirement. If you need to start out with something less, that’s okay. Start with 5%, then, after a year, bump it up to 7%. Continue like this until you’re where you want to be.

    

3. How can I stay competitive in the job market?

   Planning for retirement generally means you expect to work for a certain amount of time, and you expect your salary to increase as you move up the chain. This being the case, it’s imperative that you do everything you can to stay relevant and employable. Keep your job skills up-to-date with these proactive tips:

    

   • Broaden your scope. Become more valuable to your current and future employers. Take on different projects and challenges in your existing role, consider volunteer work or additional training.

   
   

   • Try new things. While it’s important to be an expert in your field, don’t let yourself get pigeonholed in one specific area for years on end. Keep a close eye on marketplace trends and changes in technology to better position yourself for career advancement.

   
   

   • Stay open. Knowing what’s out there is a necessary part of staying relevant—and it doesn’t mean you’re necessarily ready to leave your current role immediately. Instead, it’s about exploring your options, understanding your value and determining what gaps exist between the role you have today and the role you aspire to have in the future. Connect with companies and thought leaders on social media (especially LinkedIn) to stay in the know.

   
   

   • Prepare for surprises. Sometimes, workplace surprises happen. Being prepared means your passive job search can easily—and quickly—turn into an active search when necessary. Sign up for job alerts and stay up-to-date on news that affects your industry.

   
   

   • Capitalize on your interests. Plans are necessary but, just because, you said at 25 that you wanted to retire early and travel the world, it’s not written in stone. By the time you’re 50, you may have decided to spend your retirement years developing new ways to clean the oceans. Keep your mind open to how your interests and hobbies can turn into income—whether it’s as a side hustle or your career. 

      

4. What factors might shift my retirement strategy?

   A big part of understanding exactly how much you’ll need in retirement is doing the math. Remember, circumstances and goals will inevitably change over time. It’s a good idea to review your retirement strategy annually. Analyze the following factors in your review:

    

   • Future income

   • Costs and risk factors in relation to living expenses

   • Healthcare needs

   • Government benefits

   • Long-term care

    

   If you need a little help, Mountain America Credit Union has a calculator to help you see how your savings can add up.

Overall, the key to developing a successful retirement is to start now and stay informed. As a young person, compound interest is your best friend when it comes to saving—the money you put away today can grow much faster than the money you put away in 20 years!

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