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Millennials value retirement accounts but struggle to save

Tuesday June 10, 2014 Written by 
Four in five Millennials report the Great Recession taught them the importance of saving, but just over half are actually saving to fund their retirements.

In its survey of American Millennials, Wells Fargo found that 55 per cent of Millennials are putting away some savings.

Men (61 per cent) are more likely than women (50 per cent) to save. This difference may hinge on the fact that the median annual household income reported by Millennial men is $61,000 versus $45,000 for women. For college-educated Millennials, median annual household income is reported to be $83,000 for men and $63,000 for women.

About half of all Millennials report they are “satisfied” with their savings at this point in their lives, but the gender discrepancy is pronounced, with 58 per cent of men feeling satisfied, versus 41 per cent of women.

“The silver lining of the recession that started over five years ago is that a majority of Millennials get that saving is a necessity and even equate it with ‘surviving’ tough times. But Millennial women are starting out their working lives making far less than men and, as a consequence, are saving less and feeling less contentment at the start of their working lives,” said Karen Wimbish, director of retail retirement at Wells Fargo.

Of those Millennials who have started saving, almost half (46 per cent) are saving between one and five per cent of their income for retirement. Thirty-one per cent are saving six to 10 per cent, while 18 per cent are saving more than 10 per cent of their income.

Seven in 10 Millennials (72 per cent) are confident they will be able to save enough to create the lifestyle they want in the future, but Millennial women are far less confident than their male counterparts, with 63 per cent expressing confidence versus 80 per cent of men.

While over half of all Millennials (55 per cent) don’t think they have enough money to have a financial advisor, 16 per cent are using a paid professional to help them manage their money. That's up from eight per cent a year ago.

Fifty-nine per cent of Millennials who do not use a paid advisor say they would prefer a “seasoned advisor” with years of experience."

The online survey was conducted by Harris Poll between April 15 and May 2. A total of 1,639 Millennials between the ages of 22 and 33 were surveyed.

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