We, at KCS, have been railing about the impending U.S. retirement crisis since our founding in August 2011, primarily because of the demise of the defined benefit plan and greater use of defined contribution offerings. However, we’ve been cautiously optimistic that the Millennial generation was going to turn the tide on this looming social crisis. That is until we stumbled on a recent survey by Earnest, Amino, and Ipsos found that only 31% of this cohort (those born in the early ’80s to mid-’90s) were actually saving for retirement.
In addition, roughly 46% of Millennials reported that they’d have a difficult time covering bills if just their next paycheck was withheld. As scary as this number is, it pales in comparison to a US News and World report from 2016 that had a full 63% of the U.S. adult population not being able to meet within a 30-day period a $400 emergency auto repair or medical expense.
We know that the growing burden of student loan debt is negatively impacting a number of areas of our economy from the delay of family unit creation to the purchase of one’s first home, but the long-term implications of the failure to adequately prepare for retirement may be the most devastating of all. Saving as early and often as one can improve one’s financial situation later in life. The compounding of those early contributions will help to a far greater extent than the possibility of makeup contributions later in life.