Student loan debt is putting Millennials in a bind when it comes to retirement savings.
A survey conducted in April by the Investor Protection Institute (IPI) found half of Millennials (49%) have college-related debt, including 20% with debt of $1,000 to $20,000, 16% with $20,000 to $50,000 and 13% with $50,000 or more. More than two out of five millennials (43%) report having additional non-college debt of $1,000 to $20,000.
Just 38% of the respondents are already saving and investing for retirement. A nearly equal percentage (34%) says that, as a result of college debt, “I have either delayed starting to save/invest for retirement or been able to save/invest much less than I had hoped.”
Forty percent of Millennials say they are “concerned” about their delay in saving and investing for retirement, compared to only 7% who say they are not concerned. More than half (56%) say they worry “about having to work longer as a result of having a late start on saving/investing for retirement.” In addition, more than half (52%) say they do not expect Social Security to be around when they retire and that they will bear the full weight of financing their retirement.
More than one-third (34%) of Millennials expect to use a combination of financial professionals and their own planning aided by technology to save/invest for retirement.
“In a still tight economy where wages have not improved significantly in recent years, many graduates find themselves with hefty college loan debts and relatively modest means with which to satisfy them. Our message to these young people is very simple: As hard as it is to save, the earlier you start saving the more likely you will be able to support yourself in in the future. These are the years that will make the difference between comfortable and lean golden years. Saving and investing for your retirement should not be viewed as optional,” says Don Blandin, president and CEO of the IPI.
More survey results are online at the IPI’s website.