Financial Literacy Tips… From Britney Spears???
I’m talking about Britney Spears: She isn’t saving for retirement.
Though the 25-year old pop star is hauling in some $737,000 a month (yes, per month), the Associated Press recently reported that according to court documents, she’s not saving or investing a penny of it.
More than $100,000 each month is going to entertainment, gifts and vacations alone. While most of us may be shocked by this excess, Ms. Spears’ saving habits are actually pretty normal. The truth is, the overwhelming majority of American 20-somethings aren’t saving anything for retirement, either. Research from Vanguard shows that two-thirds of all 25-year-olds who have access to a 401(k) plan aren’t contributing.
And the worst part is, they aren’t taking advantage of their biggest asset: time. Let’s go back to Ms. Spears’ retirement plan for a minute. Let’s say she was forced to start from scratch, like any other 25-year-old. She could still maintain her lavish lifestyle in retirement. Assuming she could scrape by on 70% to 80% of her pre-retirement income in retirement – or about $590,000 a month in today’s dollars – Ms. Spears would have to accumulate a nest egg of just over $300 million by age 65.
Sound daunting? Nah.
