4 Ways Millennials and Gen Zers Can Get Back on Track with Retirement Savings Goals

The latest study from Northwestern Mutual has revealed a shocking reality for many young Americans – they are vastly underestimating the amount they need to save for a comfortable retirement. With the average retirement savings goal set at over $1.6 million, but the average savings amount for Gen Zers and millennials at only $88,400, there is a significant gap that needs to be addressed.

To help younger Americans get back on track with their retirement savings goals, here are four key strategies to consider:

1. Start Early if Possible: The earlier you start saving for retirement, the better. By beginning to save in your early 20s instead of your 30s, you give your investments more time to grow and compound, significantly increasing your savings over time.

2. Prioritize and Automate Savings: Make retirement savings a priority in your budget and set up automatic transfers from your checking account to your retirement account. Treating your savings like a non-negotiable bill will help ensure you save consistently without having to think about it.

3. Minimize Taxes Paid on Retirement Savings: Be strategic about the tax implications of your retirement savings. Consider contributing to tax-advantaged accounts like Roth IRAs or traditional 401(k)s to minimize the taxes you pay on your savings. Consulting with a tax advisor can help you develop personalized strategies to reduce your tax burden.

4. Remain Consistent: Consistency is key when it comes to retirement savings. Keep up with regular contributions, no matter how small, to stay on track to meet your retirement goals. Stay focused on your long-term objectives and avoid making impulsive decisions based on market fluctuations.

By following these strategies, younger Americans can take steps towards closing the gap between their retirement savings goals and their current savings amounts. It’s never too early to start planning for a secure and comfortable retirement.