Six out of 10 millennials between the ages of 22 and 25 said they have already started saving for retirement, according to a new survey by Wells Fargo. The focus of the survey is to understand how millennials are planning for retirement.
Here are some other key facts about those who have already started to save:
- 44% are saving 1% to 5% of their income.
- 33% are saving 6% to 10%.
- 6% are saving 11% to 14%.
- 17% said they have taken funds out of their retirement account for purposes other than rolling over to a new account.
When asked what the biggest trigger was in the decision to begin saving for retirement:
- 21% said they know that if they start saving early, they will have more money when they retire.
- 18% said they were motivated to start saving by the employer match.
While 1,005 “general population” millennials were surveyed, 504 Hispanic millennials were surveyed “for comparison purposes.” The findings regarding Hispanic millennials reveal key differences between the way Hispanic millennials and “general population” millennials perceive, and make decisions about, their finances.
- Nearly one third (30%) of Hispanic millennials said they currently provide financial support to two or more generations of their family, compared to 14% of general population millennials.
- Hispanic millennials are more optimistic (63%) about surpassing the lifestyle of their parents than general population millennials (49%).
- Hispanic millennials report a median personal income of $31,100, compared to the general population’s median personal income of $33,800.
- The median student loan debt of Hispanic millennials is $10,267, which is lower than the general population’s median student loan debt of $19,978.
- 66% of Hispanic millennials have a monthly budget, compared to 54% of general population millennials.
- 42% of Hispanic millennials consider saving for retirement a ‘high priority,’ compared to 35% of general population millennials.
One of the best ways for Hispanic families to ‘save money’ is to pay a mortgage. In doing so, these families will create family wealth by owning a home that they can one day pass on to future generations. This will enable future generations to begin saving for retirement much earlier, as they will not have a mortgage to pay.
As we’ve mentioned before, 65% of millennials believe that homeownership and the American Dream go hand-in-hand, and 70% of Hispanics agreed that owning a home is necessary in order to live the American Dream. We also know that 30% of millennials plan to buy a home within the next 5 years.