Millennials are more worried about debt than their day-to-day expenses.
A new survey by Wells Fargo Retirement, focused on millennials’ attitudes toward savings and retirement, found that 42 percent of these younger Americans feel their debt is overwhelming, which is twice the rate of surveyed Baby Boomers.
Despite their concerns about debt, nearly two-thirds of millennials see themselves as savers, with 66 percent of men and 56 percent of women describing themselves this way. Nearly 50 percent of millenials say they are saving for retirement and 51 percent say they have not begun to save but plan to by age 30.
When asked what barriers are preventing them from saving, 87 percent of millennials said they didn’t have enough money to start saving or that they wanted to pay down debt first.
Doing that might not be the best approach, according to the experts.
“I can’t stress enough how important it is for this generation to start saving now— the benefits of starting young can’t be recreated later,” said Karen Wimbish, director of retail retirement for Wells Fargo.
More than 1,400 millennials between the ages of 22 and 32 and more than 1,000 Baby Boomers between the ages of 48 and 66 responded to the survey, which was conducted by Market Probe Inc. The survey took place from Feb. 6-15.
Student loan debt is the biggest concern millennials face, with 64 percent saying they financed school through student loans. Only 29 percent of Baby Boomers did the same. Nearly 60 percent of millennials say they paid for school through grants or scholarships and 46 percent worked while attending school. Nearly half of millennials said that if they had $10,000 the first thing they would do is pay down their student loan or credit card debt.
Of the 49 percent of millennials who say they have begun to save for retirement, 34 percent said they realized that if they started saving for retirement early they would have a bigger nest egg down the road, but 29 percent said that having access to a workplace retirement program was their prime motivation.
Of the millennials who already are saving for retirement, 72 percent are in work-sponsored plans, 40 percent are in IRAs and 33 percent are setting their money aside in bank savings accounts.
Forty-seven percent of the savers are setting aside between 1 and 5 percent of their income; 31 percent are saving 6 to 10 percent; and 14 percent are saving more than 10 percent. Eight percent said they are no longer saving.
More than half of millennials say they are not confident in the stock market as a place to invest for retirement, and women feel this more keenly than men.
Thirty-two percent of those who are saving for retirement say they aren’t sure where their money is invested, but 18 percent say they are invested 100 percent in stocks or mutual funds. Fourteen percent said they have 75 percent of their money invested in stocks and mutual funds; 10 percent said 50 percent stocks/mutual funds; 15 percent said 25 percent stocks/mutual funds; and 11 percent said they were solely invested in cash or bonds.