Millennials struggling against the tide to save for retirement
More financially savvy than their parents, they know it's important to save.
Watching the financial woes of those around them during the Great Recession has certainly made an impression on millennials, many of whom are making laser-focused efforts to save their own money.
That’s among the findings of Bank of America’s Better Money Habits report, which found that nearly a quarter of millennials that are saving have at least $100,000. That’s up from just 16 percent in 2018 and 8 percent in 2015, and while that’s good news, plenty of other millennials are still struggling.
Not only do they feel as if they’re trailing their peers, they’re also dealing with both short- and long-term financial priorities while dealing with substantial debt.
Among those who are managing to set money aside, 75 percent say that retirement is their top priority. Andrew Plepler, global head of environmental, social and governance at Bank of America, is quoted in a CNN report saying, “Retirement is a point of real emphasis. Millennials have seen their parents and the culture around them go through the financial crisis. They are more conscious of how important it is to be prepared.”
Pepler added, “Today’s millennials are more serious about their finances than we’ve seen historically. They have more financial acumen than people suspect.”
To prove that, consider these stats: More than half “regularly” check account balances or track their expenses, while 46 percent pay off those credit cards in full every month. In addition, almost 40 percent have managed to raise their credit scores in the last 12 months.
Other savings goals include travel (42 percent) and home ownership—either a first or a next home (32 percent). Younger millennials in particular are focused on having a home of their own, with 41 percent of Gen Z savers (under 24) and 40 percent of younger millennial savers (age 24–30) are saving for a home.
But—and you knew there would be a but—27 percent of millennials aren’t saving at all. Much of that is thanks to debt, with more than three quarters of all millennials owing somebody, or several somebodies, a substantial amount of money. In fact, for 16 percent, it totals more than $50,000, not including mortgages.
That means that a lot of them are postponing major life goals, such as buying a home (42 percent), getting married (21 percent) and even having kids (21 percent). And 18 percent can’t even live on their own without the support of family or friends. A third worry a lot about their finances—in 2018, it was a quarter—and 82 percent would rather buy a smaller home than one that would strain their budgets. And more than half would rather stick with a higher-paying job that they’re not really satisfied with than switch to a job that’s more rewarding but pays less.
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