About one in five Millennials feel hopeful when looking at their retirement savings account balance, yet 25.34 million of them haven’t even started saving, according to a Personal Capital Retirement Readiness Survey.
The survey finds that 40% of Millennials don’t have a single retirement savings account, and 73% don’t know their net worth. Despite this, 34% of Millennial retirement savers report feeling hopeful (more than any other emotion) when looking at the balance of their retirement savings account. This disconnect shows that Millennials may have a false sense of security around their current savings and are at risk of not reaching their retirement goals.
“Millennials are oblivious to the $14 trillion retirement crisis facing America,” says Personal Capital CEO Bill Harris. “They’re dangerously assuming that retirement planning can start tomorrow, instead of today. We’ve found that Millennials are banking on working just 15 years, and many plan to live on inheritances during retirement—it’s delusional … But there’s hope if we meet Millennials where they are now, whether that be battling student loan debt or searching for easier tech-driven solutions.”
According to the survey findings, Millennials expect to work for only 15 years and save $445,687 for retirement, and they anticipate receiving an average of $1.06 million from an inheritance—twice as much income as from their paychecks.
Of course, not all Millennials are as optimistic about their retirement savings. Twenty-six percent of those who have already started saving say they feel uncertain, another 26% feel anxious and 15% feel hopeless when looking at their retirement account balances.
More Millennial men than women report feeling emotional about their retirement savings account balances (63% vs. 43%, respectively), whether that means feeling hopeless, hopeful or confident. Twice as many Millennial men as women feel hopeless when looking at their retirement savings balance (12% and 6%, respectively). Despite this, Millennial men are almost twice as likely as women to say they feel confident (25% vs. 12%, respectively) and both groups report feeling hopeful as well (24% vs. 18%, respectively) when they look at their retirement savings account balance.
The study also finds that three times as many Millennial men than women with a retirement savings account would take money from their retirement savings early to pay for a big purchase including a vacation, boat, car or wedding.
NEXT: Taking action
Millennials are interested in retirement solutions tailored to their lifestyle. More than half (54%) of Millennials say they would be likely to seek a professional’s advice when investing. They also want fast, convenient ways to view their account information. Millennial retirement savers are more than twice as likely than people age 45 and older to say if they were able to access their retirement savings account on their mobile device, they would check it daily (15% vs. 6%, respectively). The survey finds that 6% of Millennial retirement savers don’t ever look at the balance of their retirement savings accounts.
“Mobile banking led the way for everyday financial literacy, and soon mobile retirement planning is going to catch up,” Harris says. “Once people had the ability to interact more with their finances, they did—and the ripple effect is echoing loud and clear: 94% of Millennial retirement savers want mobile access to their retirement accounts. The need to demystify retirement is colossal, and when mobile access becomes the industry standard, financial planning on all fronts will finally see a full revolution.”
Personal Capital provides retirement planning tools and advisory services. To learn more about its retirement planning tools, click here.