NEW YORK (MainStreet) – Millennials know that they need to save for their financial future. They just don't know the best way to save or where that money is coming from.
As a generation, Millennials have faced numerous obstacles between them and their financial well-being early on. Generation Opportunity, a national, nonpartisan youth advocacy organization in Washington, D.C., notes that the while the unemployment rate among 18- to 29-year-olds was 9.1% in February, the effective unemployment rate — which includes those who have given up looking for work — is closer to 14%.
Their average student loan debt hovers around $33,000. According to a survey of 850 Millennials by The Principal financial group, their three largest budget items – mortgage and rent (65%), food (38%) and cars and transportation (30%) – are seen as obstacles to saving for retirement. Roughly 57% reported having emergency savings in place, with a third of all surveyed believing their emergency savings could cover basic expenses for three months. As a result, 63% of those surveyed reported saving before 25, though less than a third of that group are saving at least 10% of their salary.
“It’s clear Millennials are aware of the importance of planning and preparing for retirement. It’s also clear they are struggling to balance that with all the other demands needing their time and money,” says Jerry Patterson, senior vice president of retirement and investor services at The Principal. “Most Millennials we spoke with haven’t done the math to determine what level of savings they should be targeting, but all agreed that they weren’t doing enough.”