WASHINGTON (CBSDC) — Young men and women graduating college these days may have to wait until they’re at least 75 to retire, according to a new study.
The study from Nerdwallet suggests that rising rents and increasing student loan debt are pushing retirement age to 75 for college graduates, an increase from a previous 2012 study that estimated the age of 72.
The study found that hefty student loans are preventing adults from saving as they enter the workforce. Nerdwallet found that the average student debt for at graduation is $35,000 and usually paid over the course of 10 years. That comes out to an extra $4,000 a year for students paying off loans.
While the current average retirement age is 62, according to a 2014 Gallup poll, today’s grads can expect to tack on an extra 13 years of work.
The report also included high rents as a driving factor in delaying retirement age. Rent prices have increased 11 percent nationwide since 2012, allowing for less savings and less opportunities for owning a home.
Nerdwallet found that millennials are more hesitant and less likely to invest, preventing any returns on money that’s not being invested.
But fear not, the study authors had a few wise words for young folks trying to avoid working into their 70s. They found that 23 year olds who begin saving 10 percent today can retire five years sooner and if you’re able to save 20 percent, you might just be able to retire as early as 62.
Researchers say today’s grads could also consider living at home until the age of 25 to eliminate rent between the ages of 22 and 25, ultimately saving 5 years of extra work.
“The two most important things millennials can do is save more and save early,” Kyle Ramsay, investing manager at NerdWallet, said in the report.
NerdWallet’s calculations were based on a 23-year-old new college graduate, earning the median starting salary of $45,478 per year with $35,051 in student loan debt.
