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Millennials and Gen Xers aren't saving enough.
- Many Americans expect to buy a house or retire one day but aren't saving for it, according to an INSIDER and Morning Consult survey.
- One-quarter of millennials who expect to retire between ages 66 and 75 have no retirement savings account.
- Nearly half of Gen Xers have no retirement account, despite most expecting to retire between 56 and 75 years old.
- Thirty-one percent of millennials, 25% of Gen Xers, and 12% of baby boomers want to own a home but are not currently saving for one.
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Most Americans have lofty dreams for the future, but too many aren't prepared to bring them to life.
One-quarter of millennials who expect to retire between ages 66 and 75 have no retirement savings account, according to an INSIDER and Morning Consult survey. Plus, about 31% of millennials who expect to own a home aren't currently saving for one.
Of the 4,400 Americans polled, 353 identified as Gen Z (aged 18 to 21), 1,207 identified as millennials (aged 22 to 37), 1,131 identified as Gen X (aged 38 to 53), 1,472 identified as baby boomers (aged 54 to 72), and 237 respondents did not select a generation.
But it's not just millennials whose goals don't align with their habits. Gen Xers, the closest generation to retirement age behind baby boomers, are largely unprepared to leave work one day. Just over half of Gen X respondents said they expect to retire before age 75 - 23% said between 56 and 65 and 28% said between 66 and 75.
And yet, 47% of Gen Xers have no money saved in a retirement account - almost exactly equal to the amount who do. About 48% of the savers have under $50,000, according to the survey. Meanwhile, 10% of Gen Xers said they don't expect to retire at all - the highest of any generation - and 19% didn't have an opinion.
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These findings underscore a recent MetLife report, which revealed 55% of Gen Xers are feeling either significantly or somewhat behind on their retirement savings timeline, and 48% of Gen Xers are living paycheck to paycheck.
According the Morning Consult survey, of the 52% of millennials without a retirement savings account, 46% still expect to retire between 56 and 75 years old and 12% expect to retire early, before age 55. Looking at those with savings, nearly half of millennials have under $15,000.
Financial experts say retirement accounts are one of the best tools for saving and investing. The benefits of contributing to a tax-deferred IRA or 401(k) cannot be overstated. Contributions are taken pretax, so the money has greater potential for compound growth. And some employers will match contributions, which is essentially free money. The earlier you start saving, the greater the difference in your savings come retirement.
Millennials and Gen Xers' savings habits and goals are also disjointed when it comes to homeownership, though less so than retirement. While 8% of millennials and 23% of Gen X respondents expect to never own a home, 70% and 50%, respectively, would like to one day. However, just 40% of those millennials and half of those Gen Xers are actually saving to buy.
About 12% of baby boomers who don't own already also want to purchase a home one day but aren't saving right now. Interestingly, almost a greater share of Gen Zers (35%) are saving for a home than Gen Xers and baby boomers combined (37%). Given that this data is self-reported, lets see how those numbers change once Salle Mae comes knocking.
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