Retirement insecurity is multi-generational, as evidenced in a new study by Adecco Staffing. [See College grads worried about their retirement futures]
The class of 2011 heads into the work force with an already skeptical view of their own retirement, and for some, their baby boomer parents are footing the bill for day-to-day expenses until they can find income. Still, I doubt many 23-year-olds are investing too much time thinking of a way to retire at 65, but at least close to 20 percent of them realize they can't rely heavily on Social Security.
The Adecco survey seems to indicate these grads are correlating substantial retirement savings with employment – particularly jobs that offer employer-matching vehicles such as 401(k)s. The more time they spend looking for a full-time job offering attractive benefits like a retirement plan, the less confident they are that they're positioned to reach their retirement goals.
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Though President Obama would like for every employer to offer a retirement plan, it's a drifting goal for recent grads whose likely first job won't have it on the benefits menu, especially as more of these so-called Generation R's turn to temporary work.
But that's no reason not to start saving early. As one financial advisor friend pointed out, someone who starts saving at age 25, putting $40 every two weeks into an investment with an average 8 percent return rate (which seems a little high, but serves the purpose of this example), would have $360,439 by the time they're age 67. That's nearly twice as much savings as someone who started the process at age 35.
Social Security might dry up in 2037, but nothing beats compound interest.
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