Millennials: Great Recession Taught Them to Save
CHARLOTTE, N.C. -- In the wake of the Great Recession, 80% of millennial Americans say it has taught them they have to save now to survive financial problems they’re likely to face somewhere down the road. Still, 45% are not saving for retirement, according to a survey conducted for Wells Fargo Bank.
“Millennials” is a term that generally refers to a generation of Americans born between 1980 and 1995.
The savings picture differs by sex, with 61% of men and 50% of women reporting that they are saving, says the survey. This difference in saving rates could result from the difference between men and women’s household incomes: $77,000 for the average household headed by a man versus $56,000 for those headed by a woman. For college-educated millennials, the median annual household income was reported as $83,000 for men and $63,000 for women.
About half of all millennials report they are satisfied with their savings, but there is a difference between the sexes: 58% of men versus 41% of women.
Millennials are struggling with debt, the survey found, with 42% saying, "It is my biggest financial concern currently.” Four in 10 describe their debt as "overwhelming" versus 23% of baby boomers. And, 45% of millennial women feel overwhelmed by debt versus 33% of millennial men. Fifty-six percent, regardless of their sex, say they are living paycheck to paycheck.
When they were asked to rank their No. 1 financial concern after paying day-to-day bills, millennials said paying off student loans (29%) was their top concern where boomers said saving for retirement (44%). When asked to estimate categories of debt as a percentage of their monthly pay, millennials report their debt breaks down, on average, as follows: credit card, 16%; mortgage, 15%; student loans, 12%; car payments, 9%; and medical, 5%. Among all millennials, 47% are allocating half or more of their paychecks to these types of debt.
Fully 72% of millennials are confident they will save enough to have the lifestyle they want when they retire, but millennial women are far less confident than men, with 63% expressing confidence versus 80% of men. Of the millennials not saving, 84% say they are not because they “do not have enough money to save right now,” with no difference between the sexes. Fifty-six percent of boomers and 55% of millennials favor a mandatory retirement savings policy.
Published by The Business Journal, Youngstown, Ohio.
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