As millennial Americans have experienced the effects of the Great Recession of 2008, 80% say it has taught them that they have to save now to survive economic problems down the road.
Despite this generation’s reported lesson, the Wells Fargo Millennial Study finds that 45% are not saving for retirement, while 55% are saving.
The savings picture varies by gender, with 61% of men and 50% of women reporting that they are saving. About half of all millennials report that they are satisfied with their savings at this point in their lives, but the gender discrepancy is pronounced, with 58% of men feeling satisfied (versus 41% of women).
“The silver lining of the recession that started over five years ago is that a majority of millennials get that saving is a necessity and even equate it with ‘surviving’ tough times,” says Karen Wimbish, director of retail retirement at Wells Fargo. “But millennial women are starting out their working lives making far less than men and, as a consequence, are saving less and feeling less contentment at the start of their working lives.”
Of those millennials who have started saving, 46% are saving between 1% and 5% of their income for retirement, 31% are saving 6% to 10%, and 18% are saving more than 10%. The percentage of income saved by men and women greatly varies, with 53% of women saving between 1% and 5% (versus 39% of men). The percentages of men and women who are saving at the 6% to 10% level are both about a third; however, 26% of millennial men are saving at a rate greater than 10% (versus only 9% of women).
Seventy-two percent of millennials are confident they will be able to save enough to create the lifestyle they want in the future, but millennial women are far less confident than their male counterparts, with 63% expressing confidence (versus 80% of men).
Of the four in 10 millennials who are not saving yet, 84% say they are not doing so because they “do not have enough money to save right now,” with no difference between the genders.
“Millennial men are earning more, saving greater percentages of their income and report having more accumulated assets,” she adds. “Women are lagging behind men in their savings efforts, and this could explain why they feel less satisfied with their overall financial situation.”
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