According to a 2006 USA Today/NEFE poll, 40% of all young adults do not have a savings account. The same survey found that 55% of young adults are not saving in an IRA or 401(k) accounts.
Most young people are not counting on Social Security or company pensions. Yet, they still are not saving for the future. Last May the government admitted that the recession has depleted Social Security faster than originally expected. In 2016, Social Security will start paying out more in benefits than it collects in taxes—a full year sooner than originally projected. Even worse, Social Security will be entirely depleted by 2037, four years sooner than originally expected.
The Medicare fund is expected to be gone by 2017. Medicare is already paying out more in benefits than it is collecting.
The less people working, the less money is paid into these trusts. In addition, the baby boomers are beginning to retire. It’s estimated that 10,000 a day are applying for Social Security—the largest group of retirees in the history of the U.S.
So what is going to happen to all of the young people who are not saving for retirement? No one knows. The only way that you can be sure that you will have anything to live on by the time you retire is to start saving now. Take advantage of compound interest. Put aside whatever you can. Compound interest is when you earn interest on your interest. It’s the best way to save money for the future.
What YOU can do today
If you don’t have a savings account, or, even if you do, you can get $25 free dollars in it just by taking our financial literacy challenge. It’s easy, twenty quick questions. At the end simply fill out your email address and you’ll be emailed a list of offers from our partners. These partners include PNC Bank, FNBO, ShareBuilder, New York Life, FreeCreditReport.com, Fastweb and PayOff Live.
We want you to start saving for your future. Don’t put it off any longer.