Retirement and Young Adults

Nowadays, retirement is thought of as an event that is far in the future for young adults. In reality the future will be here sooner than we know it. There are many young adults that are not saving for retirement because of their current financial situation.

This begs the question, if retirement security is so important, how can this be accomplished? Your future can be determined in three steps.

  1. The first step is to think about what you want in your future.
  2. The second step is to figure out your financials including your debt. It’s good to keep 4-6 months of cash saved and pay off the highest debt. Once all is in good order, you can begin to save more for retirement.
  3. The last step occurs once you are in the position to start saving. When you reach this point, you will need to figure out how much you need to have saved away in order to achieve that particular dream or goal you want to happen once you retire. Once this is figured out, you will be one more step closer to achieving your retirement goal.

The Solution

The main problem that needs to be solved for many young adults is making a budget. For example, a way to help your budget is to examine what your daily expenses are and look to see where you can decrease your spending. In addition, if you put a percentage of your paycheck away automatically, right away you will need to adjust to living on a new budget.  Moreover, loans and debts play a role in financials for young adults and retirement. All in all, budgeting is the answer because loans and debts are ultimately short term while retirement is long term.  And it is said that if you start to plan for your future retirement now, you will have more money in the future than those who save when they get older because of compounding interest.


Retirement saving is important for the future because everything is changing. What our parents have or once had will most likely not be there. As of 2012, according to Forbes young adults will need to save more than their elders. In addition, Social Security will run out before most young adults who are under the age of 40 will even be eligible for it. Furthermore, many Defined Benefit Plans are frozen and do not allow for new participants to enter. Unfortunately, many young adults don’t stay at their current job long enough to qualify for their company’s retirement plan, which in turn hurts them in the future.

Most companies offer a retirement plan for their employees. The benefit of this great retirement tool is that when you put away money from your paycheck, your employer will most likely match up to a certain percent (if it is a 401(k) Plan), which means you could potentially save 10% each paycheck. There is a quote from a favorite TV show that said: “It’s the oldest story in the world. One day you are 17 and you’re planning for someday. And then quickly without you really noticing someday is today. And then someday is yesterday. And this is your life.” (One Tree Hill). In the end, your future is important. Think about it now and start making the changes needed to reach financial stability and be ready for the future when it comes.