Savings or a nest egg. Call it what you will. For many young individuals, it’s a foreign concept.
In fact, most students do the exact opposite of saving – they either rely too heavily on credit, falling deeper and deeper into debt, or are barely struggling to survive on their paychecks. So the Social Security Administration and the American Savings Education Council are launching a new campaign known as "Save For Your Future," aimed at promoting saving and financial planning.
"Young people today just aren’t realizing how important it is to save as much money as they can," said John Mackenrow, spokesperson for the accounting firm PriceWaterhouse Coopers.
In various surveys conducted by the SSA and ASEC, figures show that less than half of today’s retirees have a private pension. The purpose of the yearly campaign is to get college-aged students to understand the importance of saving money and the benefits that come with it.
"It’s really beneficial if you know how to save properly," Mackenrow said. "And if you know how to save properly, you can invest some of your savings in stocks or mutual funds and grow it at a greater rate than what you would get from a bank."
One of the primary reasons that the SSA has been focusing on promoting an educational campaign each spring is the increasing number of individuals becoming dependent on Social Security as they get older.
"The reality is, Social Security was never intended to be the sole source of income in our retirement years," said Deputy Commissioner of Social Security James Lockhart, in a press release. "Social Security was and is meant to be part of a three-legged stool, along with pensions and personal savings."
Mackenrow agrees, adding that fewer young people realize the importance of having personal assets.
"The Social Security Administration does have the right idea by trying to get their message out to young people," he said. "It’s not just young people that must be aware of this, parents need to push this message along in order for it to be effective."
Holding regional events throughout the U.S., representatives of the SSA teach students of all ages not only the importance of savings, but introduces them to tools and resources that will simplify the process of financial planning.
Anna Johnson, an economics senior at Arizona State University, said she’s saved much of her earnings throughout the years as a nest egg for her future.
"Too often I think students our age make excuses as to why they can’t save some of their money," she said. "Hopefully this program will show students why they need to save every little bit they have."
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