The pandemic is helping some millennials save more
Millennials are finally saving.
It appears the pandemic has helped some millennials save money for retirement. Wells Fargo 2020 Annual Retirement Studywhich surveyed more than 4,500 Americans between the ages of 18 and 76, found that the pandemic has left baby boomers and retirees more financially exposed and millennials saving more.
In fact, 18% of millennials have increased their retirement savings since the pandemic began, according to the study. It also revealed that 29% of millennials started saving for retirement at a younger age (25) than Gen Xers and baby boomers, at ages 30 and 36, respectively.
But that’s not the case for all millennials – 39% of millennial workers said in the survey that they weren’t sure if they could save enough money for retirement due to the economic impact of the pandemic.
The generation is known for its lack of wealthattributed mainly to the great recession and its consequences, the crippling paralysis of the United States $1.6 trillion in student debtand one the soaring cost of living.
These financial hurdles have all made it difficult for some millennials to save. “Older millennials often realize that they’re going to have to catch up on their finances if they ever want to be able to retire, but some of them have already decided they’ll probably never be able to afford to. to retire,” Jason Dorseyconsultant, millennial researcher and president of the Center for Generational Kineticspreviously says Business Insider.
It is likely that those who were able to increase their retirement savings were not part of the millennial cohort who received pay cuts where did they meet unemployed during the pandemic. But it’s not just millennials – savings are up across the board as the US household net worth hits record high in the third quarter, up 3.2% from the second quarter. With many businesses closing when the pandemic first hit the United States in the spring, people started spending less, leaving more money to save. Suspend federal student loan payments until December 31 also probably made it easier for younger generations to save money.
But saving for retirement isn’t the only way the pandemic has helped some millennials prepare financially for their future. A 2020 Northwestern Mutual study which surveyed 2,700 Americans found that just over a quarter of millennials are readjusting their financial plans, more than any other generation, and a fifth of millennials are now making a financial plan.
And when asked at what age respondents expected to retire, millennials cited the earliest target date of any generation: age 61.