Millennials haven\u2019t had the smoothest financial path, and many still feel unsure about whether they\u2019re saving enough for retirement. With high student loan balances, steep housing costs and a string of economic disruptions throughout their working lives, it\u2019s no wonder this generation struggles to pinpoint a realistic savings target.<\/p>\n
Planners say millennials need frameworks that are simple enough to stick with but flexible enough to adapt as their income grows. Here\u2019s how much they advise their millennial clients to save for retirement<\/a> \u2014 and how to stay on track even when life gets messy<\/a>.<\/p>\n Experts agreed that millennials need to be saving consistently, but the approach can vary. Christopher Stroup, a CFP and owner of Silicon Beach Financial<\/a>, encourages millennials to save 15% to 20% of their gross income toward retirement. \u201cIt\u2019s simple, realistic and resilient across career changes and market cycles,\u201d he said.<\/p>\n Jay Zigmont, a CFP and founder of Childfree Trust,<\/a> on the other hand, focuses less on saving percentage amounts, which \u201cdon\u2019t reflect personal considerations,\u201d and instead use \u201cmilestones.\u201d Saving toward milestone goals makes saving easier. Prioritize paying off debt and building an emergency fund<\/a> first, and then you can make steady, consistent contributions, he added.<\/p>\n Find Out: Retirement Net Worth: How Your Savings Compare to the Average Retiree<\/a><\/p>\n Read Next: 5 Clever Ways Retirees Are Earning Up To $1K Per Month From Home<\/a><\/p>\n Benchmarks help millennials measure whether they\u2019re on track even when income fluctuates. \u201cI generally recommend aiming for one times [your] annual salary by age 30, two times by age 35, and three times by age 40,\u201d Stroup said.<\/p>\n Zigmont is more concerned that millennials get out of debt first, but once that\u2019s done, ideally in your 30s, \u201cyou should be maxing out your 401(k)s\u201d in your 40s. Both approaches acknowledge that retirement savings in the early years may be constrained by debt and instability, but it\u2019s important to reach certain thresholds by midlife.<\/p>\n While broad rules give millennials a starting point, these planners have slightly different approaches. Stroup plans backward from the client\u2019s preferred lifestyle calculating a 3.5% to 4% withdrawal rate in retirement. Zigmont uses \u201cMonte Carlo simulations\u201d that run numerous different outcomes to account for taxes, long-term care needs and other variables. Personal spending, not income, is ultimately what determines the true savings goal, he said.<\/p>\n Story Continues <\/p>\n For millennials who feel behind, both planners emphasized that the solution is strategic recalibration, not to get caught up in shame. Zigmont reassured, \u201cAnyone who feels they are behind or starting late needs to give themselves some grace.\u201d<\/p>\n However, grace isn\u2019t enough to retire on, so eventually, adopting a smart savings plan<\/a> is key. That may mean temporarily increasing savings to 20% to 25%, redirecting bonuses or equity compensation, or extending work years slightly. \u201cThese measured adjustments help them rebuild momentum without straining cash flow,\u201d Stroup said.<\/p>\n With millennials grappling with higher costs of living<\/a>, both planners stressed that even reduced contributions will make a dent. Consistency matters more than a set amount if you don\u2019t have a lot to put away.<\/p>\n During high-expense seasons even contributing just enough to capture the employer match is better than nothing until your income goes up, Stroup noted. \u201cHigh fixed costs mean we focus on maintaining consistent contributions, even if lower than ideal,\u201d Stroup said.<\/p>\n However, it may also require looking more closely at your expenditures and retooling a budget. Zigmont said, \u201cIf you are living paycheck to paycheck, something needs to change, often meaning paying off debt as a priority or moving to a lower-cost-of-living area.\u201d<\/p>\n Both planners agree on one non-negotiable: Never leave employer match money on the table. If millennials can\u2019t save more, gradual increases tied to raises or automation can help them progress without budget shock.<\/p>\n \u201cThe minimum is whatever captures the full employer match, since it\u2019s essentially a guaranteed return,\u201d Stroup said.<\/p>\n Stroup sees many millennials assuming they can catch up later or wait for perfect timing, but this is a mistake<\/a>. I think the biggest misconception is that you must retire at 65 [which] is not a magic age,\u201d Zigmont insisted.<\/p>\n Stroup said he sees people assuming they can \u201csave more later\u201d when expenses, particularly healthcare, rise with age.<\/p>\n The antidote is emphasizing consistency and long-term planning \u2014 not timing markets or waiting for life to get easier.<\/p>\n Longer lifespans and soaring long-term care costs means millennials will need to plan for more retirement years than their parents did. \u201cMany millennials will likely live into their 90s, so planning for a 30-year retirement is increasingly normal,\u201d Stroup said. That requires higher savings earlier and stronger investment strategies.<\/p>\n Zigmont stressed that you\u2019re not ready to retire until you have a plan for long-term care, either to self-pay or buy long-term care insurance.<\/p>\n No matter where millennials start, planners agree that steady habits and personalized strategies are what ultimately turn long-term retirement goals into a reality.<\/p>\n More From GOBankingRates<\/p>\n This article originally appeared on GOBankingRates.com<\/a>: Retirement Planners: Here\u2019s How Much I Tell My Millennial Clients To Save For Retirement<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Millennials haven\u2019t had the smoothest financial path, and many still feel unsure about whether they\u2019re saving enough for…\n","protected":false},"author":2,"featured_media":204982,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[114,18928,268,114992,85,46,19428,47461,266,267,688,6300],"class_list":{"0":"post-204981","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-christopher-stroup","10":"tag-finance","11":"tag-gross-income","12":"tag-il","13":"tag-israel","14":"tag-millennials","15":"tag-paying-off-debt","16":"tag-personal-finance","17":"tag-personalfinance","18":"tag-retirement","19":"tag-retirement-savings"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/204981","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=204981"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/204981\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/204982"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=204981"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=204981"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=204981"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}