Having come of age during tough financial times, Millennials may turn out to be savers. A new study by Merrill Edge shows that young people 18-34 are saving for retirement earlier than previous generations. While the average Baby Boomer began saving at 35, many members of Gen Y are investing by 22.
Some Millennials are saving aggressively. Among those with $50,000 to $250,000 in assets, their average retirement savings are $55,000. Younger adults also take a skeptical view of Social Security: Less than half say they plan to rely on public programs for retirement, down from 63% just two years ago. Almost all young workers eligible for company 401(k) plans choose to use them.
Millennials have witnessed the end of the dot-com boom, the Great Recession, the housing crisis, major financial scandals, and burgeoning student debt. The positive financial news in a bad decade may be that young people now know the truth about financial planning: They can’t take future security for granted without being proactive about good financial habits today. Young people with the discipline to put money away early can help renew a culture of responsibility and thrift, which America needs for a healthy economy and civic life.
Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Portland program at Cascade Policy Institute.