They’re saving more and reaching retirement goals at a younger age than older generations.
Millennials get a lot of flack for being slackers, but their generation is about to take over the economy — and they are far more responsible with money management than their parents. They’re saving more and reaching retirement goals at a younger age than older generations. It’s true they earn a lot less than their elders, but millennials are best prepared for retirement and a lot better at money management.
Twenty-seven percent of millennials have $100,000 saved for retirement, with 30-35 years left to save. Meanwhile, 75 percent of baby boomers have the same with only three years until retirement age, says a study from market research company J.D. Power.
Financially and socially responsible
Yes, the number of millennials with six figures saved for retirement is far lower than their baby boomer counterparts. However, they have so much time left to save, and 61 percent of millennials have already saved $25,000 for retirement.
Millennials also make up the generation most likely to have retirement savings goals. Fifty-one percent of millennials have specific savings goals set for retirement, compared to 44 percent of Gen Xers and baby boomers. Of the millennials with retirement savings goals, 83 percent say they’re on track to meet them.
Millennials believe in social causes more than their older counterparts as well. Forty percent of millennials prefer to save and invest their money in organizations engaged in social justice issues, environmental sustainability, alternative energy and clean technology efforts – like, solar powered or wind energy, says a study from religious faith-based investment firm Cornerstone fund.
“We know that while church attendance is on the decline in this country, the commitment to, and the activity around, social causes is actually on the rise,” says Cornerstone Fund CEO Maria C. Coyne. “Millennials, especially, are taking an active role in the social justice issues of the day, and as they are able to save, it is no surprise that they’re saving and investing their dollars in socially responsible ways.”
Growing into the economy
Last year, an online publication focused on small business owners FitSmallBusiness analyzed publicly available data through Pew, Fannie Mae and others to find what will transform and save the national economy in the future. The answer they found wasn’t a what, but more a who. Its analysis concluded five ways that the millennial generation can improve the economy.
Even though this generation is known for prolonging a lot of the following expenses due to student loans, more are coming of age where they’ve stopped delaying them…
- Buying more homes
- Buying more cars
- Having more kids
- Replacing aging workers
- Spending more wisely than previous generations
So millennials aren’t exactly known for buying homes and having kids. However, Debt.com has reported before that more millennials are starting families and buying homes in higher rates than historical trends. Millennials are already the largest generation in the workforce. As more baby boomers prep to retire in the next decade, millennials will soon be the generation driving the U.S. economy.
“There are some major misconceptions about millennials, and they’ve gotten a bad reputation for a while,” says Priyanka Prakash, Managing Editor for Fit Small Business. “While millennials may possess specific personality characteristics, they are contributing to the economy in a big way. With their growing income, big-ticket purchases, and dedication to minimizing debt, this generation will be more than poised to save and grow the national economy.”
Worry today, save more for tomorrow
Most millennials grew up during the Great Recession, and know how economic downturn affected their parents. And one study from investment firm Prudential financial services concludes that millennials life experiences have prompted most of them to infect spend more wisely than previous generations. Not necessarily because they want, but they feel they need to.
Eighty-eight percent of millennials say their generation will need to work longer than previous ones to achieve the same level of financial security. Seventy-nine percent feel that by the time they reach 80 years old, a comfortable retirement will be a thing of the past. One interesting little nugget buried in its study says 77 percent believe “there will be a global recession in their lifetime that will be more disruptive than the Great Recession.”
This shows how cautious millennials about their future finances, and could be reason why so millennials are best prepared for retirement and are saving at such high rates.
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Article last modified on July 16, 2018. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Millennials Are Best Prepared For Retirement - AMP.