The other day, I came across an old Matthew McConaughey movie about a young adult that just did not want to move out of his parent's house because he had it so good. It got me thinking about the financial impact living at home has on young adults. The majority of twenty-somethings are really not interested in living with Mom and Dad long-term. But a NerdWallet Study has found those who stay at home until age 25 can retire five years earlier.
Today's Millennials are coming out of school with more student loan debt than earlier generations and residential rent has been rising by double digits just over the last 3 years: these are just 2 of the factors that are pushing the average expected retirement age for today's college graduates to age 75. This does not leave a lot of golden years to live out those retirement dreams.
There are some changes that can be made in your personal financial strategy that can change the retirement picture. Here are some Smart Money Moves to drive down that retirement age.
- Spend Less/Save More - This is a simple concept, yet can be the most difficult to successfully implement: You have to be diligent.
- Track your money - Keeping an up to date Income and Expense statement is paramount. In my 17 years in the personal financial planning business, I have found that those who can manage this are the most financially successful people, regardless of income level.
- Limit the student debt - Going to a less expensive school, like a community college, could be a big help to your long term goals. Even spending your first couple of years at a community college and finishing at a more established school will save a significant amount of money. Starting your career with no debt would be the most ideal.
- Don't wait to start retirement savings - You cannot turn back time: The earlier you start, you can look forward to a more secure and possibly earlier retirement.
Of course if you can pull off a McConaughey until you're 30, then you are golden.
Written by: Van Pappas CFP®
Vice President and Private CFO™, oXYGen Financial, Inc.
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