Here's something both baby boomers and millennials have in common – neither has saved enough money for the next phase in life.
For those planning to retire in the near future, the two most pressing concerns are possible changes to Social Security and healthcare expenses, such as longterm care if needed.
“The range for longterm care, probably the stay is about three years, and you're looking at $5,000 to $8,000 per month,” says Michael Smith, president and partner at STA Wealth Management.
Recent estimates show retirees can expect to spend roughly $200,000 on medical expenses during their golden years.
Meanwhile, millennials were forced to take lower paying jobs during the recession – limiting their ability to pay off student loans.
“So that is also delaying housing formations, they're living with their parents a little longer and not getting out there and becoming first-time homebuyers we desparately need in our economy,” says Smith.
One thing millennials have on their side is time.
“A gradual savings plan, increasing every single year gradually will lead to longterm success,” he says. “Telling yourself you're going to wait and you'll do it down the road, it will just keep being kicked down the road.”