Nearly half of young people don’t know if they are on course to achieve their retirement income goals, new research shows.
AEGON discloses this finding in a report, “The Changing Face of Retirement: The Young, Pragmatic and Penniless Generation.” The report examines financial pressures that young people ages 20-29 face, the saving outlook for young employees, potential obstacles to saving and ways to encourage young people to save more.
The report reveals that 30 percent of young people with a college or university degree are saving enough for retirement. The percentages are lower among post-graduates (27 percent), those with some college or trade school training (16 percent) and high school graduates (17 percent).
The report observes that “ballooning student debt” may significantly delay post-graduate savings.
“Between 2004 and 2012 … student debt in the United States tripled to $966 billion nationwide,” the report states. “The effect of this is that today’s younger employees must take greater personal responsibility for their savings, a challenge in the current economic and financial circumstances.”
The report adds that half (50 percent) of employees in their 20s know they need to save and 64 percent believe they “have a high degree of personal responsibility” to ensure they have adequate savings for retirement.
But most young employees question whether they will be able to achieve this goal. Nearly four in 10 (38 percent) are pessimistic they will have enough money to support their retirement. And 44 percent question they will be able to choose when they retire.
Additionally, 28 percent of young people have made no plans for their retirement. Yet, their aspirations for retirement are similar to those of the general population. Among their objectives:
- Travel (63 percent);
- Spending time with friends and family (61 percent); and
- Pursuing new hobbies (52 percent).
Additionally, the report notes, 40 percent of young people believe that adult children of retirees should help provide financial support to their parents if needed. A fifth (21 percent) also expect to spend some of their retirement caring for other family members, while just 30 percent don’t expect to provide for anyone.