This is the best time to be investing, as you have more time on your hands, as a financial manager for people wealth have come down to factor why people don’t make the most of their wealth.
1. People don’t start saving early enough.
2. They don’t invest right.
These are the top two reasons.
I will illustrate from my own research findings and how to combat these issues.
Don’t start saving young
I did some research for a personal at age 20.
How much they would need to retire with the average cost of living (U.S) in line with the present level of inflation.
At, 20 now if you factor in inflation at 2% (CPI target level) this would equate to $5,704.61 (the present average living is $ 2,500 a month for a single person in the U.S). This would give 47 years to save this monthly amount for retirement.
With simple interest, saying you put in an annuity when you hit 67 to keep in line with inflation.
You will need to fund this lifestyle for 18 years (based on the average life expectancy), this would equate to $1,348,858.
This is actually exaggerated by the amount, research says you would need $1.7 million to retire so this would equate to $253,324.54 at 20 with inflation.
From personal experience, I see that no one in their 20s saves any more.
When I compare this to the baby boomers that statistically, save on average $153,000 while gen X by the same time frame save $22,485.
People, in their 20s seem more inclined by buying new clothes to impress their friends.
But the data is out their, look at the rising cost of housing only ¼ 20s will be able to afford a house and the few that do will be by donations by their parents, so saving is paramount more than ever.
This is what the research found-