- Since the pandemic began, 18% of millennials have begun saving more for retirement, according to Wells Fargo’s 2020 Annual Retirement Study, which surveyed over 4,500 Americans.
- It’s likely this cohort of millennials weren’t affected by pandemic pay cuts or unemployment, and were left with extra money to save while parts of the economy were shut down and federal student loan payments were paused.
- Another recent study found that millennials stood out among other generations for their proactive response to the coronavirus recession.
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Millennials are finally saving.
It seems the pandemic has helped some millennials sock away some money for retirement. Wells Fargo’s 2020 Annual Retirement Study, which surveyed 4,500-plus Americans ages 18 to 76, found that the pandemic left boomers and retirees more financially exposed and millennials saving more.
In fact, 18% of millennials have increased their retirement savings since the pandemic began, according to the study. It also revealed that 29% of millennials began saving for retirement at a younger age (25) than Gen X and boomers did, at ages 30 and 36, respectively.
But that’s not the case for all millennials – 39% of millennial workers said in the survey they don’t know if they can save enough money for retirement because of the pandemic’s economic impact.
The generation has been notorious for its lack of wealth, blamed primarily on the Great Recession and its aftermath, the US’ crippling $1.6 trillion student debt burden, and a skyrocketing cost of living.
Such financial roadblocks have all made it difficult for some millennials to save. “Older millennials are often realizing they’re going to have to play catch-up with their finances if they want to ever be able to retire, but some of them have already decided that they likely will not ever be able to afford to retire,” Jason Dorsey, a consultant, researcher of millennials, and president of the Center for Generational Kinetics, previously told Business Insider.
It’s likely those who have been able to boost their retirement savings weren’t part of the millennial cohort who received pay cuts or found themselves unemployed during the pandemic. But it’s not just millennials – saving is up across the board as the US household net worth hit a record in the third quarter, up 3.2% from the second quarter. With many businesses shut down when the pandemic first hit the US in the spring, people began spending less, leaving more money to save. Having federal student loan payments paused until December 31 also likely made it easier for younger generations to stash money away.
But saving for retirement isn’t the only way the pandemic has helped some millennials financially prepare for their future. A 2020 Northwestern Mutual study that polled 2,700 Americans found that slightly over a quarter of millennials are readjusting their financial plans, more than any other generation, and that one-fifth of millennials are now creating a financial plan.
And when asked what age respondents expected to retire, millennials cited the earliest target date of all generations: 61.