In a surprising turn of events, young people in the Czech Republic aged 34 and under prioritize saving for retirement over purchasing their own homes. A study by J&T Bank reveals that two-thirds of the young populace are securing their future by investing early in retirement funds.
The motivation behind this trend is primarily to maintain their lifestyle in old age without significant compromises. One of the factors influencing this decision appears to be the aspiration for early retirement. The survey found that 12% of respondents wish to retire by 50, 15% by 55, and 34% would ideally like to bed no later than 60. Working till 70 is a preference for less than a fifth of the respondents.
Roman Koděra, a banker with J&T Bank, highlighted that more and more young people are preparing for old age by investing. “They can benefit from a long-term investment horizon, where time plays in their favor,” Koděra stated.
The common consensus among these future-focused individuals is that one should invest an amount now that they would like to receive monthly in the future. “The earlier you start investing, the smaller the amount you will spend monthly. You will take advantage of so-called compound interest,” added Koděra.
Regarding utilizing their savings, 55% of respondents plan to withdraw a monthly pension to supplement their state pension. The rest prefer to have a specific amount saved at their discretion.
Interestingly, home ownership motivates investment and savings for just under a third of young people. The reason for this lower figure could be the current high prices of homes, making it less affordable for them to buy an apartment or house.
Aside from the reasons mentioned above, other motivators for saving include the desire to secure their children’s future, the opportunity to travel, and the aspiration to fulfill specific dreams. They often start investing when they have monthly surpluses or saved between 100 and 200 thousand crowns. The most commonly used methods are savings accounts and building savings.