In the race to save for retirement, one group is doing surprisingly well: millennial parents. That’s according to a new NerdWallet survey, which found that 38% of millennial parents (ages 18-34) save more than 15% of their income for retirement. All told, millennial parents reported a median retirement savings rate of 10% of income, compared with 8% for Generation X parents (ages 35-54) and just 5% for baby boomer parents (ages 55+).
Given the picture typically painted of this age group, you might be shouting “fake news” right now. There’s one caveat: The results include only those currently saving for retirement; some in all age groups aren’t. But according to the survey, that cohort is surprisingly small among younger adults: Only 7%of millennial parents — and 15%of millennials overall — say they’re not saving for retirement at all. How are the savers pulling it off, especially given the high cost of raising children?
They’re making sacrifices
- Putting money aside often means giving things up. According to the NerdWallet data, 76% of millennial parents have sacrificed something in order to do so.
- 43% say they’ve cut back on dining out in order to save for retirement.
- Of those saving for retirement, millennial parents and millennials overall are skipping trips in roughly equal numbers: 42% and 37%, respectively.
They’re saving more when they can
- Millennial parents report that they’ve increased their savings rates after major life changes.
- More than 50% say they’ve done so after landing a higher-paying job, 39% after getting married and 24%after their children entered school.
- Other common opportunities to save more money might come after you’ve gotten a bonus or windfall, paid off a debt or cut monthly expenses such as your cable bill or insurance premium.
They’re making retirement a priority
- Saving for retirement in your early 30s is no easy task when retirement is at least three decades away.
- While the media tells us that this generation doesn’t save for retirement because they can’t deal with delayed gratification, 61% of millennial parents said that retirement is one of their top long-term savings priorities.