According to a recent study by T. Rowe Price, over 70 percent of investors aged 21 to 50 list retirement savings as their number one financial goal. But when compared to how they actually spend their money, there is a clear mismatch between what they say is their goal and how they actually spend their money. For most people in this age group, saving for retirement competes with lifestyle expenses, paying down debt and establishing an emergency fund. To ensure a comfortable retirement, its necessary to save 15 percent of your annual income for that purpose, but the majority fall far short of that. Making matters worse is that younger investors are showing a lower risk tolerance, with 37 percent avoiding stocks entirely. Combining a high percentage of savings with investments that provide higher returns is necessary to have sufficient retirement income.
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