Millennials Like Saving Money, Want to Save More
Millennials have impressive financial habits when compared to baby boomers, according to a new Retirement Saving & Spending Study by T. Rower Price. Millennials like to save, with many taking advantage of 401(k) plans while still paying down debt. On average, millennials are saving nearly as much for retirement -- 8 percent of their incomes -- as baby boomers, who are saving an average of 9 percent. And in the past 12 months, millennials are saving a higher percentage of their incomes than baby boomers when it comes to 401(k) contributions.
The research is based on online interviews with 1,505 millennials and 514 baby boomers with 401(k)s, and includes both workers and retirees.
Overall, millennials in the study report they are in surprisingly good financial shape. Eighty-eight percent say they are living within their means and 74 percent are more comfortable saving and investing extra money than spending it. However, many millennials are pessimistic about Social Security: Sixty percent expect Social Security to go bankrupt before they retire.
Here’s what else the survey reveals:
Millennials like to save, and they’d save more if they could.
Saving for retirement and paying down debt are equally important to millennials, who rank both goals as a top priority. For those who say they are not saving enough, 23 percent cited student loans as a major contributing factor.
Related Link: ‘Irresponsible’ Millennials Saving More Than Almost Every Other Group
Millennials like auto-enrollment plans.
Seventy-nine percent of the millennials who were auto-enrolled in 401(k) plans were satisfied with auto-enrollment. When it comes to 401(k) matches, 59 percent of millennials set their 401(k) contribution rate to take full advantage of their employers’ matches.
They’re open to advice and more likely to ask for help if they need it.
If faced with a sudden financial emergency, 55 percent of millennials said they’d seek the help of family and friends, compared to 24 percent of baby boomers. Millennials were also much more likely to admit they could benefit from help with spending and debt management.
They find it hard to save when they make less money.
Non-savers made less money and carried more student debt. The median personal income of non-savers was $28,000, compared to $57,000 for savers. Thirty-nine percent of the non-savers have trouble meeting their monthly expenses.
Men save more.
Millennial women are less likely to save in 401(k)s, even if they are eligible, and when they do, they save less than men. The average 401(k) balance for women participating in their 401(k) is $38,000, compared to an average 401(k) balance of $74,000 for men. Of those who are already participating in 401(k)s, only 41 percent of the savers are women.
Related link: Here Are 7 Ways People Screw Up Their 401(k)s
Chart of the Day: Why US Fertility Rates Are Falling
U.S. fertility rates have fallen to record lows for two straight years. “Because the fertility rate subtly shapes many major issues of the day — including immigration, education, housing, the labor supply, the social safety net and support for working families — there’s a lot of concern about why today’s young adults aren’t having as many children,” Claire Cain Miller explains at The New York Times’ Upshot. “So we asked them.”
Here are some results of the Times’ survey, conducted with Morning Consult. Read the full Times story for more details.
A Record Low 47% of US Adults Say They're 'Extremely Proud' to Be American
Gallup says that, for the first time in the 18 years it’s been asking U.S. adults how proud they are to be Americans, fewer than half say they are "extremely proud." Just 47 percent now say they’re extremely proud, down from 70 percent in 2003.
Another 25 percent say they’re “very proud” — but the combined 72 percent who say they’re extremely or very proud is also the lowest Gallup has recorded. Pride levels among liberals and Democrats have plunged since 2017. Overall, 74 percent of Republicans and just 32 percent of Democrats call themselves “extremely proud” to be American.
Pfizer Has Raised Prices on 100 of Its Products
Weeks after President Trump said that drugmakers were about to implement “voluntary massive drops in prices” — reductions that have yet to materialize — Pfizer has raised prices on 100 of its products, The Financial Times’s David Crow reports:
“The increases were effective as of July 1 and in most cases were more than 9 per cent — well above the rate of inflation in the US, which is running at about 2 per cent. … Pfizer, the largest standalone drugmaker in the US, did decrease the prices of five products by between 16 per cent and 44 per cent, according to the figures.”
Crow notes that Pfizer also raised prices on many of its medicines in January, meaning that some prices have been hiked by nearly 20 percent this year. The drugmaker said that it was only changing prices on 10 percent of its medicines and that list prices did not reflect what most patients or insurers actually paid. The net price increase after rebates and discounts was expected to be in the “low single digits,” the company told the FT.
Chart of the Day: Pass-Through Tax Deductions Made Easy
The Republican tax overhaul was supposed to simplify the tax code, but most experts say it fell well short of the goal. Martin Sullivan, chief economist at Tax Analysts, tweeted out a chart of the analysis required to determine whether income qualifies for the passthrough tax deduction of 20 percent, and as you’ll see, it’s anything but simple.
A Conservative Bashes GOP Dysfunction on Spending Cuts
Brian Riedl, a senior fellow at the conservative Manhattan Institute, offers a blistering critique of congressional Republican’s problems cutting spending:
Since the Republicans took the House in 2011, nearly every annual budget blueprint has promised to balance the budget within a decade with anywhere from $5 trillion to $8 trillion in spending cuts. And yet, you may have noticed, the budget has not moved towards balance. This is because the budget merely sets a broad fiscal goal. To actually cut spending, Congress must follow up with specific legislation to reform Medicare, Medicaid, and all the other targeted programs. In reality, most lawmakers who pass these budgets have no intention whatsoever of cutting this spending. As soon as the budget is passed, the targets are forgotten. The spending-cut legislation is never even drafted, much less voted on.
The annual budget exercise is thus a cynical exercise in symbolism. Congress calculates how much spending must be cut over ten years to balance the budget. Then they pass legislation setting a goal of cutting that amount. Then they move on to other business. It’s like a baseball team announcing that they voted to win the next World Series, and then not showing up to play the season.
Read the full piece at National Review.