Retirement Savings Plans: Millennials vs. Boomers

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Retirement Savings Plans: Millennials vs. Boomers

The Race for Retirement Savings Plans

The rumors of Millennials being a lazy and entitled generation seem to be falling by the wayside as of late as they continue to prove themselves a force to be reckoned with in the financial world. Looking at only the numbers, Baby Boomers still save more for retirement savings plans at about 9% of their paycheck, but this is closely followed by Millennials saving, on average, 8% of their paycheck, and for good reason.

We’ve all heard our crazy uncles, or maybe you are the crazy uncle, raving about how “kids these days have it so easy.” That is not entirely true. Baby Boomers only have to save for retirement, while Millennials are still paying off student loans. This means that despite a major expense, call it a handicap, in millennials spending, they still only trail their predecessors by one percent of their average paycheck.

Not only that, but Millennials even have a lower average income of $870,000 per year, as opposed to their seasoned rivals who have had years to build up salary raises and bonuses in the bank.

Although they do not have the numbers to support better retirement savings plans, Millennials do trump Baby Boomers in several other financial areas, such as tracking their expenses, sticking to budgets, and living within their means.

Of course, the fight is not just one sided, and the Baby Boomers do still dominate the retirement field by donating, on average, a higher percentage of their salary towards retirement savings plans. This is, however, rebutted by the Millennials’ more constant increase of funds going into their retirement savings plans.

Moreover, Millennials do not have a lot of the benefits that Baby Boomers take for granted. For instance, many Boomers began their occupations with defined-benefit pension plans, something almost unheard of to the Millennial generation. Not stopping there, it’s widely believed among the younger generation that Social Security will go bankrupt by the time they are at an age to benefit from it, which even further fuels the need to be vigilant when building retirement savings plans.

Against the odds, it seems that millennials are a bit tougher than they are given credit for. With determination and drive, the data seems to show that they will soon overtake the Baby Boomers in almost all facets of financial stability, not just retirement savings. By learning from the previous generation’s mistakes and growing up in an era marked by a major economic recession, it seems that Millennials might turn out quite alright in the future.

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