A recent survey done by Bank of America, reported that 16%, or 1 in 6, millennials aged 23 to 37 have saved $100,000 or more, up from 8% in 2015. Almost half (47%) have $15,000 saved, up from 33% in 2015.
This contradicts stereotypes of millennials as being foolish with money as optimized by the avocado toast debate that went viral in May 2017. The debate was sparked when a 35 year old Australian property developer remarked on an Australian news program that those in his generation could not afford houses because they were buying “smashed avocados for 19 bucks and four coffees at $4 each.”
However, there is plenty of good news on the financial security front for the Millennial generation: Almost 2 out of 3 (63%) Millennials say they are saving, compared to 64% of Generation X and 75% of Baby Boomers.
54% of Millennials say they have a budget, with nearly 3 of 4 (73%) saying they stick to the budget every month. 57% have a savings goal, which is higher than 42% of Gen Xers and Boomers.
64% view saving for an emergency fund as a top priority; 49% prioritize saving for retirement, and 33% view saving to buy a house as a top savings goal.
60% of Millennials feel “financially secure.” However, there are a number of financial stressors for Millennials including: 1) Not saving enough (35%); 2) Career path (24%); 3) Not planning for retirement (21%); 4) Unable to afford a home (20%); 5) Health care costs (19%); 6) Student loans, overspending, credit-card debt, not investing, or losing their job (17%).
26% of Millennials work in a gig-economy or take on short-term/freelance work, which poses a challenge for retirement planning. As a contractor, they likely do not have access to employer-sponsored retirement plans, such as a 401(k).
This challenge means that these Millennials will need to be more proactive about saving and planning for retirement, but given the statistics, it looks like Millennials are getting the message loud and clear.
TABER Asset Management is an investment advisory firm in Des Moines, IA that helps individuals across the U.S. successfully plan for retirement. Please reach out to us at email@example.com or call (515) 557-1860 to inquire more about our services.