The way Americans think about retirement has shifted. Student loan debt is a major reason why.
We’re less invested and concerned than we used to be. It was a priority to make sure we take care of ourselves and our future. Today’s generations don’t seem to care as much. Student loan debt has overtaken their priorities. This makes it less likely they’ll have extra money to save.
According to a new survey by Edward Jones, less than half of all Americans contribute to a 401(k). When they asked people, who have a 401(k) if they knew how much the monthly fees were, half of them had no idea there were any fees.
Ameritrade asked in a related survey if they knew how much they were paying for Netflix and other streaming services, and 96% said they did. 37% wrongly assumed they didn’t have to pay fees on their 401(k). Surveys also found that only 37% are contributing to their retirement accounts and 18% through a health savings account.
These numbers are astonishing. It would appear as if Americans view retirement as a goal they should tap into later in life, but it’s not something they need to be concerned about right now. It reveals a real lack of financial concern. The problem is, they’re too much underwater with their student loan debt to care.
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Student Loan Debt Forcing People to Throw in the Towel
If we take a good look at the last 15 years or so, the market has been virtually dead money. There’s a reason why a lot of baby boomers now plan to work until 60-65. They might’ve had a plan to retire at 45, but the market didn’t permit them. Now they’re behind on their savings.
Rumors abound that social security might be dead in the future. Regardless of how much we put into it, and the evolution of the market, it’s scaring people from investing. Health care costs are shooting through the roof and the housing market is volatile. Stocks are changing with the weather. All of this makes retirement investment a crap shoot.
Throw in massive amounts of student loan debt, and you have a crisis on your hands. As Gen-Xers head ever closer to retirement age, they’re not as concerned about retirement. It would seem they have a million other concerns on the forefront of their mind. Saving money is an impossible venture. This is only going to devastate them in the future.
Retirement Saving is a Must
The thing about retirement saving is: you just have to do it. You can’t afford to avoid this topic. Even if student loan debt is a massive burden, you still have to save money. Most people enjoying their golden years right now started saving when they were young. To assume you’ll just make up for lost time later is a major fallacy. You won’t.
There are plenty of people now who just say they’ll work well into their 60s and 70s. The problem is, the job market isn’t too friendly to the elderly. A new generation and new technological advances will change over the next few decades.
According to experts, the best plan of action is to diversify their savings as to not put all of their eggs into one basket. That risks losing it when the market sours. There are recession-proof stocks, commodities, and other investments.
Either way, working well past retirement age is never ideal. We can only hope this new optimism in our economic recovery allows each generation to have renewed faith in saving for the future. That includes government finding a real solution to the student loan debt crisis.