A survey shows 62 percent of Americans said they need to catch up on their retirement savings. The results also reveal 66 percent of millennials are still behind their retirement savings. Only 30 percent of them said they have started saving or investing early.

Several factors hinder younger professionals (ages 23 to 28) to save up for their golden years. What’s surprising about this is that debt isn’t the main reason but something else.

Housing Costs: A Major Hindrance

According to the survey, 37 percent of millennials said housing costs are the top reason they are struggling to save up for retirement. They spend most of their income on housing partly due to the rising rental prices.

Millennial parents are the most affected. One in five parents spends 50 to 59 percent of their income on housing, and eight percent said they’re paying 60 to 74 percent.

Additionally, supporting family members financially is another reason 33 percent of millennials can’t set aside money for their retirement. Meanwhile, 26 percent said they can’t save up for retirement because of inadequate income.

In another survey, 46 percent of affluent millennials aren’t saving enough, and 39 percent expect to work beyond retirement age. The majority of well-off millennials are afraid of investing due to a lack of knowledge. Those who feel more knowledgeable about investing are five times more likely to be more confident in making financial decisions.

Saving for Your Retirement Years

Financial experts recommend saving up $1 million before retirement. This is because there might be various ways in which life can throw you a curveball, such as render you without the care of your immediate family members during your old age, for instance! Then you would need to look at a facility with assisted living and senior wellness program to help you through! But. if you’re one of those people you struggle saving up, how can you save a million dollars before you retire?

It all depends on your income and how early you start saving. You need to save between 10 percent and 15 percent of your gross salary, and it’s best to start early to make the process easier and less expensive. You may need to bring more than $61,372, which is the median household income in the country.

In case you start at age 25, you need to earn $22,764 annually with an eight percent return and save $284.55 per month. But if you start at age 40, you need to earn $83,563 annually with the same percentage of return and save $1,044.53 monthly.

These calculations, however, don’t take into account different the challenges you may experience in your lifetime, such as unemployment period or sudden illness, or long-term illnesses that may leave you seeking something like this at home senior care in North Nashville service once you are retired to help you out with everyday tasks. The amount you save may also change as your salary increases over the years.

Saving money is not easy, but these three tips may help:

Save for an emergency

Saving money for an emergency fund should be a primary goal. This saving should be easily accessible and should only be spent in the event of sudden medical bills or job loss. Take the example of something like the diagnosis of Alzheimer’s that can be an emergency. The costs associated with care, including medical treatment, medications, and specialized services, can escalate quickly. This can often catch families off guard. Therefore, early planning is crucial; families should consider advance directives and legal documents to outline healthcare and financial preferences, ensuring that wishes are respected as the disease progresses.

Additionally, access to community resources and support networks including elderly care options offered by experts – which can be availed of by looking for “memory care near me” or similar phrases on the web – are vital for managing the emotional and physical challenges of family caregiving. Understanding insurance coverage for long-term care is also important, as many may not have adequate coverage. By incorporating potential Alzheimer’s-related costs into your emergency savings strategy, you can better prepare for the financial and emotional challenges that may arise, ensuring support for you and your loved ones during critical times. Once you have an emergency fund, you may start saving for other goals, such as a new car, your child’s education, and your retirement fund.

Pay yourself first

Save a certain percentage of your income every time you receive your paycheck. You can set up automatic transfers from your bank account to your savings each month, ensuring the money doesn’t stay in your pocket. Putting bonuses, raises, and tax refunds into your savings account also help accumulate funds effortlessly. Remember, saving money allows you to prioritize yourself, especially during your retirement years. How, you ask? Imagine this scenario: You’re in your late 70s with no steady income. Fortunately, you have a substantial nest egg that you can rely on for living your life. You can use a portion of these funds to not only hire Senior Home Care Caregivers but also to cover essential expenses such as food, gas, and medical bills. By doing so, you can ensure that your needs are prioritized and fulfilled.

Understand the time value of money

The earlier you start saving, the bigger fund you will have in the future. The money you put in your savings or an investment vehicle will earn interest over time. This process is called compounding interest, where interest is calculated on the initial principal, including all the interest you received from previous periods of deposits or loans.

Nobody wants to retire broke. But several factors, like housing costs and inadequate income, make it challenging to save for retirement, particularly for younger professionals who already have a family. Saving early is essential to enjoy your retirement years in comfort.