CNBC, Oct 23, 2019: To Retire At 65, Millennials Will Need To Save Nearly Half Of Their Paycheck
If you think the standard recommendation of putting 15% of your paycheck toward retirement is impossible to achieve, get ready for an even bigger hurdle. At least one retirement expert thinks that number should be much higher.
Millennials should aim to set aside nearly half of their income for the future, according to Olivia S. Mitchell, professor of insurance/risk management and business economics & public policy, and executive director of Wharton’s Pension Research Council at the University of Pennsylvania. If you want to live off even half of your final salary in retirement, you need to save 40% of your income over the next 30 years, she says.
That calculation, which is based on academic research from an MIT economist, takes into account a few assumptions. The biggest is that you want to retire at 65. That’s not much of a stretch: About a third of millennials say they expect to retire between the ages of 65 and 69, according to a recent T. Rowe Price survey. However, 43% of millennials say they actually expect to retire earlier.
