Reg­u­lar con­tri­bu­tions

The National - News - - BUSINESS | MONEY & MARKETS -

If you steadily save a rea­son­able por­tion of your in­come over a long pe­riod of time, you’re go­ing to end up with a pile of money. “Sav­ing slowly and me­thod­i­cally while keep­ing ex­penses low will gen­er­ally get you where you need to go,” says Ti­mothy LaPean, a cer­ti­fied fi­nan­cial plan­ner in Min­neapo­lis.

“You don’t need to shoot for the sky. All you need is a long series of in­cre­men­tal wins.”

The mil­len­ni­als in Fidelity’s analysis aren’t su­per savers. Less than a third have a to­tal sav­ings rate – which in­cludes their con­tri­bu­tions, plus com­pany match­ing dol­lars – of 15 per cent of their in­come or more.

Fi­nan­cial plan­ners com­monly use that 15 per cent fig­ure as a re­tire­ment sav­ings goal. That means more than two-thirds of these mil­len­ni­als aren’t sav­ing “enough” by most stan­dards – or even close to it. The av­er­age con­tri­bu­tion rate for the group, not in­clud­ing an em­ployer match, is 7.5 per cent.

And mil­len­ni­als also have temp­ta­tions that pre­vent them from sav­ing. Ac­cord­ing to Mer­rill Edge, their “fear-of-miss­ing-out” (FOMO) men­tal­ity is also very ap­par­ent in their spend­ing habits. The ma­jor­ity say they are more likely to spend on travel, din­ing and fit­ness than save for the fu­ture.

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