Proposed Legislation Aims to Help Young Workers Put Time on Their Side
Retirement planning often directs attention toward midcareer 401(k) participants and those nearing retirement — and understandably so, given their tighter timeline to secure post-retirement financial stability. But what about the youngest members of the workforce — the 18- to 20-year-olds, or those even younger? This demographic faces a potentially more challenging economic outlook than their older counterparts, with factors such as increasing student debt hampering traditional financial milestones like purchasing a home.
According to a recent Bank of America Institute study, the impact of higher rent inflation disproportionately affects younger consumers, with median rent payments soaring by 16% year over year in July, compared to just 3% for Baby Boomers. Additionally, the research shows many Gen Zers fall short along several areas of financial preparedness, including emergency savings (56%), investing (29%) and saving for retirement (43%). Financial planning is especially important for this age group, as early contributions could prove most valuable due to the compounding returns of reinvested earnings.
