Though 81% of retirees credit good health as the key ingredient to a happy retirement, it’s likely that 100% of retirees would agree that it doesn’t hurt to have money, too. According to a recent TIME magazine report, millennials are even better prepared for retirement than the baby boomers were. A survey conducted by T. Rowe Price revealed that millennials are already saving 8% of their paychecks for retirement.
Millennials would be saving even more if they had better paying jobs, and/or didn’t have student loans to pay, according to Anne Coveney, T. Rowe Price’s senior manager of retirement thought leadership. With a median personal income of $57,000, nearly 67% of millennials have a budget, and stick to it. (Compared to the 55% of baby boomers who do the same.)
Millennials, as a whole, expect that Social Security will be bankrupt long before they reach retirement age. This means that they consider themselves to be on their own in regards to retirement. This could have been a negative tipping point, considering millennials’ previously mentioned low median income. However, the more they save, the more that data suggests that they’ll be better at taking advantage of corporate matching plans. Coveney comments:
“They are exhibiting financial discipline in managing spending and are defying stereotypes that this generation is prone to spend-thrift, short-sighted thinking.”
Millennials are also more independent in their finances. They seek out advice from robo-advisors, special algorithm based programs that help to index funds and have lower fees involved than the conventional brokers. For example, Wealthfront, an automated investment service, has a client base in which 60% of its clients are under 35, and only 10% are over 50.
This data could prove a point about millennials, which is that we have no clue what their generation will have achieved in 50 years time. But at least we know that they’re headed to a happy, prosperous retirement. (Hopefully.)