Are you a millennial with nothing saved for retirement? You’re not alone. According to a new report from the National Institute on Retirement Security, two-thirds of people between the ages of 21 and 32 have nothing saved for retirement.1

Of course, you may not think retirement should be a big priority for you right now. After all, if you’re in your 20s, you may have more than 40 years left until you retire. You also may be dealing with more pressing financial issues, such as student loan payments or credit card debt.

While it may seem like retirement is too far out on the horizon to worry about today, now may be the right time for you to start saving for your retirement. Below are three reasons why it pays to start your savings plan in your 20s. A financial professional can help you develop and implement a savings plan.


You’ll have to fund much of your retirement with your own savings.

Past generations of retirees could count on pensions or Social Security to fund their retirement. Both of those types of benefits offer guaranteed income for life, no matter how long you live. They make ideal retirement funding tools because you have a predictable, constant stream of income available.

Unfortunately, millennials may not be able to count on pensions or Social Security to fund their golden years. Pensions have been disappearing from employer benefit menus for some time. In 1998, 59 percent of Fortune 500 companies offered a pension to employees. As of 2017 only 16 percent of those companies offered a pension to new hires.2

Social Security is also in jeopardy. The Social Security trust fund is projected to run out by 2034. At that time, benefits could be reduced 21 percent. It’s possible that benefits could be reduced even more in the years beyond.3

If you’re in your 20s, you may not be able to rely on pensions or a full Social Security payment. That means you’ll likely be entirely dependent on your personal savings after you retire. The earlier you start saving, the better off you will be.


You can save on taxes by saving for retirement.

Your retirement savings may be earmarked for the future, but they can also have benefits today. In fact, some retirement accounts offer current tax benefits. For example, assuming you meet income guidelines, you can contribute as much as $5,500 to a traditional IRA and then deduct the contribution from your taxes.

Also, contributions to a 401(k) are usually deducted pretax from your paycheck. The deduction reduces your taxable income, which then reduces the amount of taxes withheld from your pay.4


Time is a powerful financial tool.

Finally, the most important reason to start saving early is that time may be your most powerful financial tool. If you wait until you’re in your 40s or 50s to start saving, you’ll have to put away more money each year to reach your goal. That could bust your budget.

If you start now, however, you have more years to save. That means you can put away less money each year and still meet your savings objective. You also get the benefit of compounded growth over a long period of time. That can help you accumulate more money and build up your retirement assets.

Ready to start saving for your retirement? Let’s talk about it. Contact us today at Jim Lee Financial. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.








Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

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