A new study has revealed that Millennials have more retirement benefits savings than other generations. It also mentioned the reasons for the same. The reason behind the same is that they start saving early for retirement. Though their savings are not as high as they could have been, they have the time on their side. The study also criticized the Millennials for making fewer contributions towards the retirement benefits savings than what is required for living a better life in the golden years.
Study Says Millennials have more Retirement Benefits Savings than Other Generations
The study that says Millennials have more retirement benefits savings than other generations was entitled Running on Empty, Attitudes and Actions of Defined Contribution Plan Participants. It was conducted by Natixis which is a French corporate and investment bank that has been into operations since 2006. The study was conducted on Millennials that have a defined contribution plan. It was released on December 15, 2016.
The Age Factor
In the survey that says Millennials have more retirement benefits savings than other generations, the major reason for the same was also mentioned. It is the age factor. Millennials start saving in a retirement plan when they are just 23 years old while the baby boomers start at 31 and Generation X at 27.
The Savings Amount
In the survey, the Millennials also reported that their combined retirement savings came around $69,570. Though the number is not high enough, the Millennials have started early and have time on their side which gives them a longer timeframe for boosting their retirement assets. It is pertinent to add here that the said amount is just 8 percent of the savings goal of $869,662. It’s high time for the Millennials to start making a difference towards how to go about achieving the retirement goals.
The authors of the study that stated Millennials have more retirement benefits savings than other generations also have a warning for Millennials. They said that 91 percent of the surveyed were saving less than 10 percent of their salaries towards retirement goals. Millennials must hit the rate of at least 10 percent if they wish to reach the retirement savings goals, believe the authors. Otherwise, they may fall short of meeting the goal despite having an early start and more times on their hands as compared to the other generations.