The majority of America's millennial generation describes themselves as "savers" but their actions don't reflect this description because they don't have enough money to start saving or want to pay down debt first.
America’s millennial generation is fully entrenched in adulthood and it’s becoming clear the effect that becoming adults during the Great Recession had on them.
A new Wells Fargo Retirement Survey revealed that while the majority of millennials (61%) describe themselves as “savers,” their actions don’t support this description. The survey’s respondents included 1,414 millennials between the ages of 22 and 32.
Half of the millennials surveyed say they are saving for retirement. Those who haven’t started saving for retirement plan to by the time they turn the median age of 30; however, the vast majority say their either don’t have enough money to start saving (87%) or they want to pay down debt first (81%). More than a quarter, (27%) feel like time is on their side for their savings or investments to grow, though.
“I am glad to see about half already saving for retirement, but we’re also seeing that half of this generation has not started to save and is putting it off until the 30s,” Karen Wimbish, director of Retail Retirement at Wells Fargo, said in a statement. “I can’t stress enough how important it is for this generation to start saving now — the benefits of starting young can’t be recreated later.”
The top concern of millennials right now, however, is paying off their student loan debt. Almost two thirds (64%) financed school through loans, which is a huge increase from just 29% of baby boomers who did so.
And yet, millennials are confident, with 67% believing that they will achieve a greater standard of living than their parents. Half are confident in their abilities to earn and save money and 70% are confident that they will be able to save enough to afford the lifestyle that they hope to have in retirement.
However, millennials are showing that they do not have as much of an entrepreneurial spirit as previous generations, with 75% agreeing that the way to get ahead financially is to work for a company offering a career path instead of breaking out and starting their own business. This is something the health care industry is seeing as more medical school graduations are opting for hospital employment rather than private practice.
“We see a lot of optimism among millennials and a belief in their ability to create a good future,” Wimbish said. “The key for this generation is to put a financial plan into action, so their beliefs become a reality.”