Millennials Can Pay Off Student Debt and Save for Retirement at These Companies

One of the biggest things standing in the way of millennials saving properly for retirement is a massive amount of student loan debt. The rising costs of living have many millennials living paycheck to paycheck, barely making their student loan payments, and in this scenario there is simply no way to save anything for retirement. Even $5 a week might seem too much for some. But what if you could pay off student debt and save for retirement? The following companies are giving their employees the ability to do just that.

PwC – More than 8.5K employees of this company have taken advantage of their loan-offset program. The program is a company benefit that offers to pay $100 in student loan payments for enrolled employees per month, for a maximum of six years. All total, they have helped their employees pay off nearly $26 million worth of student loan debt, and PwC is among the first of large companies to help tackle the student debut problem.  This helps free millennials up to save more towards retirement, earlier.

Abbott – The massive healthcare company is giving their employees the option to pay off student debt at the exact same time they save for retirement. As part of their 401(k) plan, Abbott will contribute a maximum of two percent of an employee’s income towards their retirement savings if they pay an equal amount towards student loans. A person who makes $400 a week could end up with $512 in retirement savings per year, and knock at least that much off their student loan debts at the same time. 

Sotheby’s – Employees at this company who have qualifying college debt can receive $150 towards their loan’s principal when they make a payment of their own. The company offers up to $1.8K per year in these benefits.

Other Noteworthy Company Programs

Although the following companies don’t offer direct assistance for student loan debt, they do offer programs that may make life easier for a debt-laden millennial generation. 

Urban Outfitters – The clothing store allows employees to bring their dogs to work with them, and offers discounted pet insurance. 

FS Investments – They’re physical locations are equipped with an onsite nutritionist and gym.

Sweetgreen – This company offers an incredible five months paid maternal and paternal leave, which is also available for adoptive parents and foster parents. 

Amazon – The massive company is rated as one of the best places to work, and the benefits make it obvious why. In addition to the normal 401(k) with matching, health benefits, and paid time off, Amazon offers paid maternity leave, paid sick leave, and healthy snack options at least once a month for all employees.  

Conclusion

If millennials want to pay off their student debt and save for retirement at the same time, they need to get creative. Working for one of the companies listed above can help them to achieve both these goals simultaneously, which is significantly easier than working two jobs (which is a secondary way many millennials are trying to pay off their student debts). 

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Why Millennials are Afraid They Won’t Receive SSI in Retirement

The millennial generation doesn’t have the optimism and big hopes for retirement previous generations have had. Why? An astonishing eighty percent of them are afraid they won’t receive Social Security benefits upon retirement. But why do they feel this way, and what does the future of SSI really look like? 

Why do Millennials Think They Won’t Receive SSI Benefits?

The Social Security Administration’s Board of Trustees has recently reported that there will be no trust fund reserves left by 2034, and millennials have taken this to mean they will not receive any benefits upon retirement. 

This sounds like a very bleak future where a limited portion of the senior population will ever be able to retire. Those who do will likely retire even later than the average 62 to 67 years that the current generations do. It also means that, if millennials ever want to retire at all, they will need to start saving earlier and will need to save larger portions of their income. 

But is the future if SSI benefits as bleak as it appears to be? Or has this statement been taken out of proportion by a generation already financially stressed out due to the rising cost of living and mountains of student loan debt?

What Does the Future of SSI Really Look Like?

The future of SSI is not as bleak as millennials expect, according to the Social Security Administration’s previous acting commissioner, Carolyn Colvin. She says that there will be Social Security funds available when the millennial generation reaches retirement age.  

What does look likely to happen, however, is that the funds paid out will be less than previous generations received by as much as a quarter. This is because there will be no trust fund reserves left if things continue as they are, and millennials will need to replace that with retirement income sources from other places. The money that the millennials pay into social security through taxes, however, will still be available to them. 

Tips for Millennials to Save More for Retirement

There are some ways millennials can help to save additional money for retirement, to help supplement the likely decrease in SSI benefits. A few ideas include:

  •   Start early. Even saving $1 a week in your 20’s and early 30’s can make a difference in the amount of interest accumulated.
  •   Find a job with 401(k) matching. This means a company will match a certain portion of your total income if you automatically deduct it from your paycheck towards a 401(k). If your total income is $400, and your company matches 1%, then you can save $4 a week and have the company match that so $8 a week is put away.
  •   Consider working a part-time job during the summer or holiday season and place at least half of all earnings into a retirement account.

Conclusion

Although the millennial generation is worried they won’t receive any SSI benefits upon retirement, the future isn’t quite as bleak as that. They will, however, receive less than previous generations and will need to make up that money to have a comfortable retirement. The tips listed above give great ideas on how millennials can do just that. 

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Why Many Retirees Are Still Working

The word “retirement” literally refers to a period after the working years, when senior citizens of a certain age can live off a combination of Social Security Income and any retirement savings accounts they have. The idea of continuing to work during retirement might sound counterintuitive, yet more retirees than ever before are still working.

 

SSI Doesn’t Cover Everything

There is a widely held misconception that SSI checks will cover all or most of a person’s expenses in retirement, but this is far from the truth. SSI alone is not enough to sustain a comfortable, livable income, and many find that their monthly checks do not even cover all of their most basic living expenses. 

Supplemental Income

Retirees aren’t still working fulltime, but they are deciding to supplement their income with part-time work or self employment. This is allowed while collecting Social Security Income, although it is always a good idea to check current limitations before deciding to obtain a new income stream.

By working one or two days a week, or spending a few hours freelancing, retirees are able to add $100 to $200 per week to their household income. For retired couples, this might amount to $200 to $400. While it may not seem like much, this small amount of money can make a huge difference in the type of life retirees are able to live.

Working also has the added bonus of giving retirees a sense of purpose, allowing them to socialize with others regularly, and maintains a loose schedule each week. These additional benefits help to fight the depression and isolation common in the senior population.

Extending Retirement Savings

Having a supplemental income allows retirees to extend the life of their retirement savings accounts. With additional income coming into the household regularly, retirees do not have to pull as much money from their hard-earned nest eggs. 

If, for example, an additional $800 per month is necessary to uphold a retiree’s lifestyle in additional to monies received via SSI, then earning an additional $100 per week will decrease the necessary withdrawal amount by $400. If retirees work only the first five years of retirement, they have potentially allowed $24,000 to remain in their retirement savings. With people living longer than years past, this additional money is more useful than ever. 

There is a secondary benefit to allowing money to sit in a person’s retirement account, and that is a continued accumulation of interest. Considering the example above where a person only works for the first five years of retirement, the additional $24,000 left in savings will continue to grow at the interest rate set by a person’s bank. 

Conclusion

Many retirees are continuing to work part-time during their retirement, for at least the first few years. There are numerous benefits associated with doing so, most of which are financial. Besides being a financially sound decision, working can also help to decrease the risks of depression associated with boredom and isolation in the golden years. 

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Financial Checklist for Those Nearing Retirement

Are you getting close to that long-awaited retirement? Many people who find themselves within five years of their planned retirement can begin to feel a mixture of excitement that they’ve almost reached their goal, and anxiety that they haven’t financially prepared. This financial checklist can help those nearing retirement feel more confident that they’ve prepared properly. 

 

Know Your Expenses

Do you know what your expenses will be in retirement? If you are within five years of retiring and plan to downsize, now is that time to do it. It is better to begin downsizing between two and five years out of retirement than to attempt it upon reaching the actual post-working years. Not only will this help to save money for a boost in savings the last few years, but will ensure an excess of cost in the first year of retirement doesn’t hurt your nest egg.

Regardless of whether you plan to downsize or not, it is important to take stock of how much your expenses will be. This includes rent or mortgage, utilities, groceries, gas, car insurance, and any other recurring payments.

Consider Healthcare Costs

Many people fail to consider the true cost of healthcare in retirement is, or believe that Medicare will cover all their expenses. This is inaccurate, and those with pre-existing health conditions (even minor ones) can end up paying a significant amount of money that they didn’t plan for. 

Plan Out Your SSI Strategy

Understand how Social Security works, and what amount of money you will actually be getting. For example, many people fail to realize that drawing early can hurt the amount you receive. Although you can begin withdrawing your SSI at age 62, you can’t receive full benefits until age 67. Waiting to start withdrawing benefits can help create a better retirement, and a few extra working years never hurts if your health allows it.

Consider Working Longer or During Retirement

As mentioned above, it might be worth it to work a few extra years before retirement. This not only helps lengthen the life of your retirement savings, but can help bulk them up before you are no longer able to. 

Even if you decide not to work extra years, you may want to plan to work part-time or do freelance work in the early years of retirement. More retirees are working than ever, because it helps to supplement their social security income and reduce the amount they need to withdraw from their savings.

Speak with Financial Consultant

Three to five years before the age you plan to retire, it is highly suggested you speak with a financial consultant to ensure you’re on the right track. These trained professionals can let you know if something is amiss, and doing so during this timeframe gives you enough time to correct most minor issues or situations. 

Conclusion

After going over the financial checklist above, those nearing retirement can feel more secure in their preparations. This not only allows these individuals to focus more on the excitement of reaching their retirement goals, but also ensures that they can live the life they want once that goal has been realized. 

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