What are individual savings rates for yourself and your kids? We breakdown the four age group demographics to give you a complete answer.
Hello, welcome to Arista Advice. Question of the week is: "Paul, what are individual savings rates for myself and my kids?" This question was derived from a conversation we had with a client that the client was wanting to be engaged in a conversation with their kids about savings.
Let's first understand the four demographics. The first demographic are the Baby Boomers. These are the great people that were born from 1946 to 1964, ages 57 to 75. There's roughly 69.6 million Baby Boomers. What's the recommended savings? They should be saving 8 to 10 times their salary, if they're still working.
The second group of people, my people, the Generation Xers, the individuals that were born from 1965 to 1980, ages 41 to 56. There's approximately 65.2 million generation Xers. The recommended savings for them? Three to six times their salary.
The third generation is the Millennials. The Millennials were born from 1981 to 1996, age groups, ages 25 to 40. There's an estimated 72.1 million, the largest segmentation of them. They should be saving one to three percent of their salary. This is the fastest-growing group. They are very achievement oriented. They are establishing families, and they are caring for their parents.
The fourth and final, the Generation Z born from 1997 to 2012, ages 7 to 24. There's 67.1 million. What's the recommended savings for them? It's one times their salary. The good news is that the Generation Z are making great strides in preparation financially. 88% of them are saving money monthly already right now. 73% of them are already contributing 3% or more into their retirement investment account, and 28% of them want to work past retirement and have a hybrid retirement.
Hope these four demographics are helpful and the savings and investment rates that they should be deferring on a monthly and yearly basis numbers are helpful. Please remember, go to AristaWealth.com to look at other tools, tips, and videos to help you live a life of significance.