Millennials are saving more for retirement

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.
Source:  NerdWallet