Why Millennials and Gen Z Can’t Afford to Wait on Retirement Planning

When you’re juggling student loans, rent payments, and maybe saving for a house down payment, retirement can feel like a distant concern. But here’s the reality: the earlier you start planning for retirement, the more secure your financial future becomes. For Millennials and Gen Z, starting now isn’t just smart—it’s essential.

The Retirement Crisis Facing Younger Generations

Unlike previous generations, Millennials and Gen Z face unique financial challenges that make retirement planning more critical than ever. Social Security benefits may be reduced by the time you retire, traditional pension plans have largely disappeared, and healthcare costs continue to skyrocket.

Consider this: a 25-year-old who saves $200 per month with a 7% annual return will have over $1.3 million by age 65. Wait until age 35 to start, and that number drops to about $610,000. The ten-year delay costs you nearly $700,000 in retirement savings.

Why Starting Early Gives You a Massive Advantage

Starting retirement planning early lets your money grow more over time thanks to compound interest—the earlier you start, the bigger the impact. You’ll also need to save less each month to reach your goals, freeing up more of your budget. Plus, beginning young gives you decades to recover from any market downturns, making it easier to stay on track for the future.

3 Quick and Easy Steps to Get Started Today

Step 1: Open a Retirement Account

You don’t need thousands of dollars to begin. Many brokerages allow you to open retirement accounts with no minimum balance. Choose between these options:

• 401(k) through your employer: If your company offers a 401(k) plan, especially with matching contributions, prioritize this first. Company matching is free money—never leave it on the table.
• Roth IRA: Perfect for younger workers in lower tax brackets. You contribute after-tax dollars, but your money grows tax-free and you won’t pay taxes on withdrawals in retirement.
• Traditional IRA: Offers immediate tax deductions on contributions, making it attractive if you’re in a higher tax bracket now than you expect to be in retirement.

Step 2: Automate Your Savings

The easiest way to stick with retirement saving is to make it automatic. Set up automatic transfers from your checking account to your retirement accounts right after payday. Start small if needed—even $25 per month builds the habit and gets your money working for you.

Most employers allow you to automatically deduct 401(k) contributions from your paycheck. For IRAs, most banks and brokerages offer automatic investment plans that transfer money from your bank account monthly.

Step 3: Take Advantage of Employer Benefits

Beyond 401(k) matching, explore other employer benefits that can boost your retirement readiness:

• Health Savings Accounts (HSAs) offer triple tax advantages and can serve as retirement accounts after age 65
• Stock purchase plans let you buy company shares at a discount
• Financial wellness programs may provide free investment advice

Take Action Today

Retirement planning doesn’t require perfect timing or perfect knowledge—it requires starting. Every month you delay will cost you money in potential compound growth. Begin with small steps: open an account, set up automatic contributions, and choose simple investments.

At Russo Law Group, we understand that retirement planning intersects with many legal considerations, from estate planning to business succession. If you would like to speak with an experienced elder law attorney regarding your situation or have questions about something you have read, please do not hesitate to contact our office at 1 (800) 680-1717. We look forward to the opportunity to work with you.

Disclaimer: The information provided above is for general informational purposes only and is not legal, financial, or tax advice.