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
Budget ‘Chaos’ Threatens Army Reset: Retired General
One thing is standing in the way of a major ongoing effort to reset the U.S. Army, writes Carter Ham, a retired four-star general who’s now president and CEO of the Association of the U.S. Army, at Defense One. “The problem is the Washington, D.C., budget quagmire.”
The issue is more than just a matter of funding levels. “What hurts more is the erratic, unreliable and downright harmful federal budget process,” which has forced the Army to plan based on stopgap “continuing resolutions” instead of approved budgets for nine straight fiscal years. “A slowdown in combat-related training, production delays in new weapons, and a postponement of increases in Army troop levels are among the immediate impacts of operating under this ill-named continuing resolution. It’s not continuous and it certainly doesn’t display resolve.”
Pentagon Pushes for Faster F-35 Cost Cuts
The Pentagon has taken over cost-cutting efforts for the F-35 program, which has been plagued by years of cost overruns, production delays and technical problems. The Defense Department rejected a cost-saving plan proposed by contractors including principal manufacturer Lockheed Martin as being too slow to produce substantial savings. Instead, it gave Lockheed a $60 million contract “to pursue further efficiency measures, with more oversight of how the money was spent,” The Wall Street Journal’s Doug Cameron reports. F-35 program leaders “say they want more of the cost-saving effort directed at smaller suppliers that haven’t been pressured enough.” The Pentagon plans to cut the price of the F-35A model used by the Air Force from a recent $94.6 million each to around $80 million by 2020. Overall, the price of developing the F-35 has climbed above $400 billion, with the total program cost now projected at $1.53 trillion. (Wall Street Journal, CNBC)
Chart of the Day - October 6, 2017
Financial performance for insurers in the individual Obamacare markets is improving, driven by higher premiums and slower growth in claims. This suggests that the market is stabilizing. (Kaiser Family Foundation)
Quote of the Day - October 5, 2017
"The train's left the station, and if you're a budget hawk, you were left at the station." -- Rep. Mark Sanford, R-S.C.