Not only are millennials the most populous generation in the American workforce, but the tremendous amount of credit card and student loan debt they carry has made them the most indebted generation in modern history – which is forcing them to put off other major life decisions.
But despite the fact that a surprising number of millennials are fat and broke, many still have an optimistic view on when they expect to retire. Though their generation mostly lacks the generous pensions offered to Baby Boomers and some Gen Xers, A TD Ameritrade survey found that millennials who use the service expect to retire at the surprisingly young age of 56. That’s six years below the current minimum age for receiving social security.
What’s even more surprising, of the 1,500 millennials surveyed for the study, 53% expect to become millionaires at some point in their lives. However, that percentage is unevenly divided between men and women: Of those surveyed who expect to become millionaires, 70% are men, compared with 38% of women.
Roughly 80% of millennials struggle with at least one type of debt. Meanwhile, according to the study, millennials are prioritizing saving unlike previous generations – or maybe it just seems that way. According to the survey, roughly 70% of respondents to the survey described themselves as “savers.” Though that doesn’t quite jive with the official data, which show that the personal savings rate in the US is near all-time lows.
A small percentage of savers say they never expect to pay back their loans (and recently we pointed out that about 100 or so Americans have more than $1 million in student loans). All of this is happening at a time when interest rates are rising, inflation has been showing signs of moving higher, gas prices are climbing and a shortage of homes has forced real-estate values to levels last seen before the housing crisis. Meanwhile, their net worth will likely remain negative for a while.
Back in March, we pointed out that debt-laden millennials have been set back an average of $140,000 compared with their parents – a problem that has been compounded not just by student loans but by the costs of rent, food and other bills like car loans, which have also seen rapid growth.
Any millennial who honestly expects to retire at 56 should be aware: If you truly want to retire young, you need to start saving in your 20s. Because with “the power of compounding,” as TDAmeritrade strategist JJ Kinahan explained it, “even those who start early can end up with more in the end.”
Of course, by ‘saving’, Kinahan appears to mean ‘gambling in the stock market’, but tomato-potato.