How Millennials Can Overcome Financial Anxiety and Secure Their Future

Lucy Lazarony is a seasoned personal finance journalist who has been writing since 1998. She specializes in creating clear, approachable articles on credit, debt, budgeting, retirement, and savings.

A staggering 66% of millennials fear running out of money more than death itself, according to research from the Allianz Center for the Future of Retirement. This concern isn't unique to millennials—70% of Generation X and 61% of baby boomers share this anxiety.

Key Insights

• Most millennials fear financial depletion over mortality.
• Implementing strategic financial moves like delaying Social Security benefits and diversifying investments can ease this worry.
• Creating a budget, managing spending wisely, and leveraging Roth IRA accounts are effective steps toward financial confidence.

Effective Strategies to Alleviate Financial Fears

Many millennials cite inflation, taxes, insufficient Social Security support, and market unpredictability as drivers of their financial anxiety.

Experts recommend several approaches to build a secure retirement foundation.

Maximizing Social Security Benefits by Delaying Claims

Postponing Social Security benefits until age 70 can significantly increase monthly income. Priya Malani, founder of Stash Wealth, explains, "Waiting until 70 boosts your benefits by approximately 8% annually beyond the full retirement age of 67, with cost-of-living adjustments helping maintain purchasing power over time."

Building a Diverse Investment Portfolio

Millennials should allocate a substantial portion of their savings to the stock market to harness the power of compound growth. Eric Roberge, CFP and founder of Beyond Your Hammock, advises, "Focus on increasing your savings rate and invest in long-term growth assets to combat the fear of running out of money."

Diversification across asset classes, sectors, and global markets helps mitigate risks, cushioning against downturns in specific areas, according to Malani.

Smart Budgeting and Thoughtful Spending

Establishing and adhering to a budget that prioritizes emergency funds and long-term goals is crucial. Roberge suggests, "Maintain an accessible cash reserve and keep expenses well below your income to create a comfortable financial buffer."

Prioritizing Aggressive Savings

Saving beyond expectations is key. Roberge recommends, "Aim to invest 20-25% of your gross income toward long-term objectives like retirement to build a robust financial future."

Leveraging Tax-Advantaged Accounts

Roth IRAs offer millennials an exceptional opportunity to grow wealth tax-free. Malani highlights, "Pay taxes upfront while in a lower bracket, then enjoy tax-free growth and withdrawals in retirement—an invaluable advantage given uncertain future tax rates."

Conclusion

The fear of outliving one’s finances spans generations, but millennials can take control by adopting proactive financial strategies. Wise budgeting, strategic investing, and utilizing tax-efficient accounts like Roth IRAs, combined with delaying Social Security claims, empower millennials to face the future with confidence and peace of mind.

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