[ad_1]
“With traditional FIRE, we would spend no money and squirrel it away forever,” Ms. Minichiello, 36, said. Instead, she is aligning her savings with her desire to enjoy life before she turns 65, which is why she and her husband, Dave, 42, recently focused their savings strategy on buying a second home.
For Dr. Patel, it’s challenging to save 50 percent of her salary even though she is not a big spender.
“I would have to give up vacations and the things I like that are splurgy, like eating in finer restaurants or flying to New Jersey to see my family at the drop of a hat,” she said, adding that she could save $3,000 a month if not for her loan obligations.
Aspiration vs. reality
Mark Smrecek, a retirement consultant and financial wellbeing leader at Willis Towers Watson, the consulting firm, said most millennials he works with are not actually able to save enough for financial independence by 50 — it’s just not realistic given their living costs and the lifestyle they aspire to. This year, the company’s Global Benefits Attitudes Survey showed that 36 percent of millennial workers in a broad range of industries were saving 5 percent or less of their income but wanted to save more, 26 percent had taken a loan from their 401(k) and 25 percent had withdrawn funds from their 401(k). Yet, 52 percent said they expected to retire before 65.
The 2022 Retirement Insights Survey from TIAA revealed similar views, with 31 percent of people ages 30 to 39 indicating that they have an above-average level of confidence in their ability to plan for retirement. Young millennials, those 25 to 29, are the most assured: 40 percent said they had an above-average level of confidence in their ability to plan.
Despite this confidence, millennials aren’t saving enough, and many aren’t contributing enough to their 401(k) to get the full employer match, Mr. Smrecek said.
Source link
