The pandemic has had an impact on everyone -- especially financially -- from businesses to individuals.
But there is one silver lining: Today’s financial uncertainty has more people taking retirement planning seriously, including a very young generation.
A new survey from Credit Ninja shows that the financial uncertainty has 21% of people reassessing their retirement age. In Michigan, those stressing about retirement are as young as 22 years old -- below the national average.
According to Mark Evenson from Cornerstone Community Financial Credit Union, that worry is a good thing.
“It’s actually great,” Evenson said. “It did surprise me a little bit that they’re already thinking about it at age 22 ... it’s actually great to hear.”
But while some are thinking about retirement that young, there are a lot of people who aren’t, but should be.
It can be difficult to convince children to begin planning for a future that is 50 years down the road, but Evenson says that parents should work with their children and help them understand their options.
According to Evenson, the best thing parents can do is to show their children what it actually takes to retire, and help them decide if they’d rather work into their 80s or 90s, or if they’d prefer to leave the work force at 55 or 65 years old.
“Show them what it takes to get there,” Evenson said. “Living a certain lifestyle in retirement -- if that’s important to them, if they want to travel, if they want to purchase a beach house -- you really have to sit down with that 14 or 16 year old.”
One of the biggest mistakes people make when planning for retirement, according to Evenson, is putting money under the mattress, so to speak. He says money that is not earning interest won’t be worth as much down the road due to inflation.
“Inflation is 2.5% a year -- you have to actually beat that in order to create a healthy portfolio,” Evenson said.
He also warns people against planning to rely on social security, as its future is not clear.
“We just don’t know what social security is going to look like,” Evenson said. “But I absolutely love the mentality that the younger people are looking to take care of themselves. They’re not looking to rely on social security, because, once again, we don’t know what it’ll look like.”
Another big mistake that people make is not asking for help from financial advisors or planners. Some people don’t want to ask for professional help because they are embarrassed by how much they make, or how little they’ve set aside -- but Evenson says advisors don’t care about that.
“We see that all the time -- the advisor doesn’t care,” Evenson said. “The advisor is there to help you. There are quite a few firms out there that do not have a minimum (that you’re required) to invest.
“You will find someone willing to work with you and happy to share your journey,” he added.