Eight-in-ten Millennials said that the 2008 economic collapse was a wakeup call to save “now” to “survive” future financial problems, but less than half (45 percent) are not saving for retirement.
Despite a challenging job market, debt pressures and savings struggles, Millennials express confidence in many aspects of their personal lives, a new Wells Fargo study finds.
Seven-in-ten (69 percent feel better off financially than others among their peers, while 68 percent expect their standard of living before retirement to be better than their parents. More than eight-in-ten (84 percent) feel they have the skills to achieve their career goals by the time they are 40 and three-fourths (78 percent) believe if they lost their job they could find a comparable one within a year. Baby Boomers, in comparison, are much less confident they would be able to find a comparable job in that time frame (58 percent).
And yet: While eight-in-ten said that the 2008 economic collapse was a wakeup call to save “now” to “survive” future financial problems, less than half (45 percent) are not saving for retirement. The saving efforts vary by gender, with 61 percent of men and 50 percent of women self-reporting that they are saving.
While 58 percent of Millennial men said they are satisfied with their savings at this point in their lives that percentage plunges among women (48 percent). The gender gap is related to salary inequality noted Karen Wimbish, director of Retail Retirement at Wells Fargo, in a statement. “As a consequence, (they) are saving less and feeling less contentment at the start of their working lives.”
The Wells Fargo study findings are similar to Spectrem Millionaire Corner's 2014 study of Affluent households which also found a heightened confidence among the youngest respondents about their financial futures. Fifty-five percent expect their personal financial situation to be stronger a year from now, compared with 48 percent of respondents overall with a net worth of at least $100,000.
Half expect to have sufficient income to live comfortably during retirement compared with 43 percent of Gen Xers and late Baby Boomers (but they are also more concerned that their household is not saving enough to meet their financial goals).
Millennial optimism is even trumping serious concerns about debt. It is the biggest financial concern among 42 percent of respondents. Four-in-ten said their debt is “overwhelming,” while 56 percent said they are living paycheck-to-paycheck.
The most pressing Millennial debt, the survey found, are: Credit card debt (16 percent); mortgage (15 percent); student loans (12 percent); auto loans (9 percent) and medical debt (5 percent).
And yet: Seven-in-ten Millennials are confident they will be able to save enough to create the lifestyle they want in the future. Again, women are less confident than their male counterparts
What is driving Millennial confidence? Perhaps it is their faith in their financial knowledge. Three-fourths say their financial literacy level will enable them to address any financial problems in the next decade. A majority (59 percent) said the stock market is the best place to invest for retirement.
And yet: Forty percent of Millennials said they have “no idea” how much money they will need in retirement. Of Millennials surveyed who are saving for retirement, almost half are saving up to five percent of their income, 31 percent are saving between 6-10 percent, and 18 percent are saving more than 10.
Related story: Millionaire Millennials most confident about their financial knowledge
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.