Millennial Women Must Save, Prepare for Retirement

A recent study by Ameriprise Financial shows that millennial women are likely to feel stretched financially and are the most likely to have difficulty balancing the need to spend time managing money with other responsibilities.

Here is part three of the conversation had with Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial. What advice do you have for younger women who feel that they are very stretched financially?

Suzanna de Baca: We know that a lot of millennials are juggling a lot of expenses and a lot of them have student loan debt. But a written financial plan can help you think about how you balance your short term needs and wants and your long-term needs and wants. And it’s very important to be thinking about creating emergency savings, paying down debt where you can, being mindful about taking on appropriate debt, while at the same time, laying the foundation for a healthy retirement by contributing to your employer-sponsored retirement plan.

We all know that emergency savings is vital. Some financial planners say three to six months, others say six to eight months, and some say eight months to one year. Which amount is appropriate?

I think it depends on your age and where you are in life. In the past, three to six months was very much the rule of thumb that the majority of financial advisers used. However, after the recession, many financial advisers said six months to one year was advisable. And it might be more prudent considering the types of experiences people are having with job loss. So I think under ideal circumstances it would probably provide more people with a feeling of comfort. But for millenials and some other individuals, three to six months might be more realistic. And it’s important to remember not to only save for emergencies but for other financial goals.

What are some money management tools that Ameriprise has available?

We have everything ranging from financial planning software that our advisers use on behalf of their clients to retirement planning tools, such as the 3-Minute Confident Retirement Check. For our clients there are a variety of online tools to view accounts, move money, aggregate access, or to store documents.

Read Parts one and two of this interview here.