What You Can Learn from Millennials for a Better Retirement
There may be a lot of them, but what can this hip, dreaming and some say lazy generation tell us about having a better retirement? It turns out that some of their ideas will work quite well for those of us looking to make the most of our finances in our golden years.
Here are 6 millennial trends that Baby Boomers — especially those of us looking to cut costs — can apply for a more prosperous and fulfilling retirement:
1. Sell the House
Millennials have the lowest home ownership rate for their age group in history. While this might not bode well for their own wealth creation, it can be a good model for those of us who already own a home.
For most people nearing retirement, our homes are our most valuable asset. The equity we have built up in our homes can be used for retirement. For a better retirement, many people downsize into smaller or less expensive homes. Other people stay put, but secure a reverse mortgage as a way to tap into their own home equity.
Intrigued? Try modeling these options for your housing in the NewRetirement retirement calculator. After setting up your account, navigate to the housing section and see what happens to your plans if you downsize or get a reverse mortgage.
2. Sell the Car
The research is not crystal clear, but millennials may have lower car ownership rates than any previous generation. To get around, the youngsters opt for bike riding, public transportation and car sharing services.
If cost cutting is of interest to you, then selling your car may be a great option. Did you know that transportation is — on average — the second highest cost in retirement? Transportation costs retirees more than even healthcare. Only housing costs more.
If you want to get rid of your car, look at the walkability of your neighborhood, public transportation options and the availability taxis, uber and car sharing services (zipcar, getaround and Hertz on demand) in your community.
3. Get Rid of Your Phone and TV
Millennials are never seen without their cellphone. However, very few of them still have a traditional landline in their home. Similarly, many millennials have cancelled cable TV subscriptions and instead watch shows on their computer.
Depending on your own preferences, you might explore these options for some small monthly savings in retirement.
4. Talk About Money
Once upon a time, taboo topics for polite conversation included sex, politics and money.
For better or worse, most of us now feel freer to talk about a wide variety of subjects, but personal finance remains an uncomfortable subject.
However, millennials are beginning to change the taboo on talking about money — online at least. According to Facebook IQ, 40% of the financial conversations taking place there are driven by millennials, on everything from credit cards to investments.
Why is talking about money a good thing? Behavioral research has found that having peers who have good financial habits, can help you to have good financial habits. It is kind of like healthy eating and exercise. You are more likely to engage is positive behaviors if your peers are engaged in those behaviors and talking about them. Furthermore, you can gain a lot of useful information by sharing ideas with friends.
5. Seek Adventure
According to Jeff Froms, President of FutureCast, a marketing consultancy that specializes in millennial trends, millennials crave the joy of adventures and discoveries, whether epic or everyday.
Seeking adventure and new experiences is a great idea for a better retirement. As we get older, our perception is that time is passing more quickly. As we grow older, more things are familiar to us and our brains can process what we know faster than what we have never experienced before.
You can actually slow down the clock by trying new things. New experiences take more time to process, making time appear to last longer.
6. Use Technology
According to a Nielsen survey, millennials cited technology use as the most defining characteristic of their generation.
While you probably are not going to let technology take over your life, there are some pretty useful ways to use phones and computers to enhance and have a better retirement.
- Having trouble connecting with your grandchildren? Try texting them! Even better, see if you can connect over instagram or snapchat!
- Plan your vacation or find a retirement job. Technology is a great way to plan almost any aspect of your retirement.
- In fact, you can plan your retirement online.Planning does not need to be scary or complicated. The NewRetirement retirement calculator makes it easy. Take two minutes to enter some initial information, then see where you stand today. Next, start adding more details and changing some of your information. Discover meaningful ways you can improve your retirement finances.This tool was named a best retirement calculator by the American Association of Individual Investors (AAII).