Stock market downturn may necessitate doubling of millennial savings
- The stock market’s performance isn’t as robust compared to previous years, which might make it necessary for millennials to double their retirement savings, financial analysts told the Washington Post. Bespoke Investment Group said that, in 2017, the average gain in the Standard & Poor’s 500-stocks index will be 4 — the lowest stock market gain since 2005.
- While acknowledging that the stock market is unpredictable, investment specialists are lowering their expectations of gains not just in 2017, but possibly during the next few decades.
- Analysts at the Employee Benefit Research Institute estimate that if average stock market returns fall by 2% during the upcoming decades, millennials will need to save twice as much as they currently do to make up the losses.
The news is unsettling given reports that millennials have outpaced boomers when it comes to saving for retirement. As the Post correctly points out, millennials might be forced to double their retirement savings while repaying college loans, juggling high daycare costs and dealing with the ever-increasing expense of housing.
Employers can help the largest employee group invest and save more by making financial investment training a business priority.
The new fiduciary rule could also protect millennial investors. The rule gives financial brokers and advisers more responsibility in handling retirement accounts. Fiduciaries must act in in the account holders’ best interest, which includes giving them sound investment advice.