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Of those currently saving for retirement, 69 percent do so through an employer-sponsored plan.
Move over Baby Boomers. These days all eyes are on Millennials, those young adults between the ages of 18 and 34 who are now America's largest living generation.1 According to the U.S. Census Bureau, Millennials in the United States number more than 75 million -- and the group continues to expand as young immigrants enter the country.1
Due to its size alone, this generation of consumers will undoubtedly have a significant impact on the U.S. economy. When it comes to investing, however, the story may be quite different. One new study found that 59 percent of Millennials are uncomfortable about investing due to current economic conditions.2 Another study revealed that just one in three Millennials own stock, compared with nearly half of Generation-Xers and Baby Boomers.3
On the Retirement Front - How might this discomfort with investing manifest itself when it comes to saving for retirement -- a goal for which time is on Millennials' side? According to new research into the financial outlook and behaviors of this demographic group, 59 percent have started saving for retirement, yet nearly two-thirds (64 percent) of working Millennials say they will not accumulate $1 million in their lifetime. Of this group, half have started saving for retirement -- 37 percent of which are putting away more than 5 percent of their income -- despite making a modest median $27,900 a year.2
As for the optimistic minority who do expect to save $1 million over time, they enjoy a median personal income that is about twice that -- $53,000 -- of the naysayers. Three out of four have started saving for retirement and two-thirds are deferring more than 5 percent of their income; 28 percent are saving more than 10 percent.2
So despite their protestations, their reluctance to embrace the investment world, and a challenging student loan debt burden -- a median of $19,978 for the 34 percent who have student loan debt -- Millennials are still charting a slow and steady course toward funding their retirement.2
For the Record … - Here are some additional factoids about Millennials and retirement revealed by the research:
1Pew Research Center, "Millennials overtake Baby Boomers as America's largest generation," April 25, 2016.
2Wells Fargo & Company, news release, "Wells Fargo Survey: Majority of Millennials Say They Won't Ever Accumulate $1 Million," August 3, 2016.
3The Street.com, "Only 1 in 3 Millennials Invest in the Stock Market," July 10 2016.
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