Millennials Are Saving For Retirement Sooner Than You Think
Don’t call the millennials lazy, they are saving for retirement 17 years earlier than their parents, according to NowThis Money.
In a study conducted by Chase and Vox Media, millennials were stashing away change for retirement well before anyone probably thought.
In a series of articles aiming to provide education on financial literacy and how to develop and implement healthy spending and savings goals, Chase and Vox discovered a few interesting points when it comes to how millennials spend and save.
On average, millennials begin saving for retirement at age 23, seven years before Gen Xers began saving and 17 years before baby boomers started to save.
That’s because millennials understand that social security won’t be available to collect by the time they reach the age of retirement, which in the U.S. is 65 years old.
They also experienced the recession of 2008, when many millennials witnessed their parents either lose their jobs or be forced to juggle two jobs in order to make ends meet.
And not all Gen Xers who suffered from the recession were able to stay afloat. Many endured foreclosures on their homes and depleting their savings and retirement accounts just to make it through the tough times.
As a result, many millennials learned how to save from witnessing their parents struggle financially, and seeing first-hand how nothing is guaranteed to last, even when it comes to money in the bank and a prosperous business.
In fact, most millennials are earning less than their parents were earning at their age, yet they are managing to save more than any other generation.
And not only are they smart about putting away roughy 5 percent of their income, they also are less likely to dip into their 401(k) or IRA accounts. Most make contributions and never withdrawal from their retirement accounts.
Financial literacy is also something millennials tend to understand more than any other generation. Roughly 77 percent of millennials said they feel comfortable making big financial decisions mostly because so much information is readily available to them with the help of the Internet.
They are also more inclined to get their financial information from multiple sources with the help of social networking and speaking to friends about financial matters.
Speaking of financial matters, millennials are also budget savvy and great at sticking to their proposed budget.
When most baby boomers don’t have a savings account, millennials not only save money well, the first thing they stash money away for is an emergency fund.
Perhaps it’s time to give a big pat on the back to millennials. They are savings superstars!