11 Millennials Retirement Statistics
The economic crisis has not been kind to the Millennial Generation. Between job stagnation and crushing debt, financial security has been an uphill battle. At least, that’s what we’ve been told. When it comes to Millennials, the media spouts conflicting views: a devil-may-care collective that would rather spend money now then save up for retirement. On the other side of the coin, some say that this generation is one of the hardest workings to hit the job market. Regardless of speculation, statistics are a good measurement of how Millennials are preparing for their future.
1. 66% of Millennials have nothing saved for retirement.
Statistics show that individuals between the ages of 21-32, 66% have nothing saved according to the national institute on Retirement security. This is not good news when it comes to building a secure financial future. Millennials tend to have trouble saving for retirement when they are burdened with the immediate problems of now. With many making low-wages and battling high bills and rent costs, it can be difficult to squirrel away any cash.
2. Millennials are employed as part-time employees at nearly twice the rate of previous generations.
The main requirement for saving money is just that: money. Many millennials don’t suffer from a lack of saving skills; they just lack the means. About 25.1% of millennials are chained to part-time work. Compared to 13.6% from Gen X and 14.9% for Boomers, that is a significant difference. Most part-time workers not only have a lack of wages, but they also don’t have access to a company retirement plan. While it is possible to go outside the company, it is more difficult on a low income.
3. Over half of millennials have one year or less of tenure with their current employers.
Millennials are often tagged with the label “job hoppers.” This comes from the belief that this generation spends a year or less at their place of employment. This is not true; ¾ of college-educated millennials were employed for more than 13 months. Other studies show that is just the same or less than Gen X and Boomers. Shortened employment is linked more often to lay-offs and closures, which makes it more difficult to save for retirement. Job security is a major crisis that has been holding millennials back.
4. Millennials attribute part-time status and time at an employer to retirement savings
Times have changed, as did with the current state of employment. Many part-time workers do not have access to retirement savings with their company. Additionally, many millennial works haven’t reached the amount of time necessary to participate in their company 401K. It is rare to be offered retirement benefits within the first year of your employment. Coupled with disappearing pensions and job opportunities and saving for retirement can prove to be difficult.
5. Education is one of the leading industries in which Millennials are employed.
In regards to employment, education is the lead for most employed millennials. Followed up closely by the restaurant industry, construction, and retail, their place of employment determines their ability to save for the future. Where they work can affect their ability to participate and access retirement amenities provided by employers. Depending on where they work, millennials will have different opportunities to save.
6. ⅔ of millennials work for an employer that offers a retirement compensation plan.
While more than half of millennials have access to an employer-sponsored program, that doesn’t mean they can use it. Often, many aren’t eligible to participate. This lowers the number of millennial participants to ⅓. Depending on the job, millennials may have better access as time goes on, provided they stay on with their current employers.
7. When offered and able, Millennials will take advantage of retirement savings.
Almost 95% of millennials offered the opportunity to save for retirement through their employer take advantage of it. This shows that when the ability is there, this generation won’t let the savings pass them by.
8. 82.4 % of millennials contribute less than 6% of their income to retirement.
Even with access to a retirement plan, millennials are still not saving enough. Studies show that the employer often contributes more to their employees’ retirement account. Of course, this may be due to low-wages, high cost of living, or poor money management.
9. Paying student loans may attribute to a lack of retirement savings.
There were 12.1 million student loan borrowers between the ages of 30 to 39 years old who had $408 billion in debt in 2015, according to a Value Penguin analysis of Federal Reserve data. While this can be part of the problem, more often, the main issue with saving for retirement is lack of access. However, student loans can be an added obstacle for millennials trying to get ahead on their savings.
10. Latinos and Latinas are less likely to participate in employer retirement plans.
Only 19% of Millennial Latinos and 22% of Latinas participate in an employer-sponsored retirement plan, compared to 41% of Asian men and 40% of Millennial Caucasian women, who had the highest rate of participation in an employer-sponsored retirement plan. Often, the direct problem is that these employed millennials do not have access or eligibility to participate in these programs.
11. Most working millennials have less than $20,000 saved for retirement.
The hardest statistic is that most millennials do not have enough saved up for retirement. Considering all the statistics listed, the main issue this generation encounters is a lack of opportunity. Though employers offer retirement plans, many are not eligible. Many millennials are trapped in part-time employment or they may be self-employed without access to a company program.
Saving for Retirement
Millennials are facing a real financial crisis when it comes to building a healthy retirement fund. Young people want to achieve financial independence and establish goals that will help them in the future. While it may not be as simple as spending too much money or paying for the now, the average millennial faces hardship when it comes to optimal wealth management. When given the opportunities, millennials are saving, but time will tell if this generation breaks free from their financial burdens. If you want to learn more about wise investing for millennials, contact a trusted Horizon Trust financial custodian today.