Study Identifies Drivers To Millennial’s Retirement Savings
Financial experts are concerned that Americans are not saving enough for retirement. Millennials are no exception, as they represent a vast majority of those who are not saving for their post-career lives. In a recent report by Navient, Money Under 35, a glimpse is provided at how Millennials look at retirement and what was shown to correlate with increased savings rates.
Money Under 35 is a national study that looked at the financial health of young Americans aged 22-35 and found that just 3 in 10 young Americans are saving and nearly 4 in 10 believe that saving for retirement can wait. Of those saving, the average amount saved for retirement in 2017 was a total of $32,818, a decrease from the prior year’s total of $37,638.
It appears that the driver behind the belief that retirement saving can wait is that young people are facing competing demands for their financial resources and making decisions between paying off debt and building their savings.
However, the study also found that the presence of a 401(k) plan correlates strongly with increased savings rates. Millennials whose employers offered a 401(k) match program were almost twice as likely to save for retirement than those whose employers did not, 61% and 31% respectively. Also, the young adults who were offered such a program have accumulated nearly twice the average savings, $32,851 compared with $18,879.
While young adults are confronted with competing financial goals, employers who offer 401(k) match programs do motivate Millennials to save for retirement which leads to improved financial health.