Here's the Biggest Asset Millennials Have for Saving Money

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You're never too young to start saving. 

There's a risk that Social Security might not be around by the time millennials are ready to retire.  Social Security was created in 1935. The system was designed to be solvent back then.  And life expectancy was a little bit lower. Today, we're in an environment where there are only two workers for every one retiree and that number's falling, the fertility rate in the United States is falling, we're not allowing immigrants into this country. 

Now it's possible that in the next 10 to 12 years, we'll be paying out more than we collect If you're in your 20s, you should plan on it not even being there, plan on having to fund all of your retirement through your savings and your 401(k).

Student Debt vs Human Capital

Student Debt doesn't go away. So you might want to be able to at least cover that with life insurance but the other thing is you want to maintain your insurability.  Life is about risk and reward. So we're always focused on reward but we seldom think about risk. So become a student of risk.

You can't just think about your financial capital. You also have to think about your human capital, it's your biggest asset when you're younger because you have more of that than you do financial capital.  

Fidelity came out with a study that said when you retire at age 65, you should have 10 times your final salary set aside for retirement to fund an adequate standard of living. So two-thirds of Americans have less than $100,000 and you think that the median household income in America is around $60,000.  That means that they have less than two times their salary set aside for retirement at this point, they're off by a factor of eight, so save young.

Related. Ask Bob: Social Security Survivor Benefits

Related.Ask Bob: Social Security Disability Benefits for Children and Adults

Learn more about TheStreet's Robert Powell at Retirement Daily.

Missed Part 1? Everything Millennials Need to Know About Retirement - Ask Bob