A New York Times’ recent article, titled “Saving Young People From Themselves” by Steven Rattner, got us thinking: Do young people need saving when it comes to saving?
The article’s statistics paint a startling picture. We as young people are poorer than our parents were on average at our age. We are bogged down by the incredible weight of student loan debt. We are not paying enough attention to how much we are saving for our retirements.
Very few young people are contributing a portion of their income to a retirement account, such as a 401K. (43% of those under 25 years old compared to 62% between 25 and 34 years old and 70%+ of those over 45 years old.) Young people also contribute less to those accounts than older people. (4.3% for those under 25 years old and 5.5% for those between 25 and 34, compared to 8.7% for those between 55 and 64.)
All of these factors together mean less income, less savings and less future financial security for young people. But what is the solution? Mandated savings programs? Tax incentives for contributing to a retirement fund?
What do you think?
Leave a Reply