The results of “Generation Y Workers: The Principal Financial Group Retirement Plan Participant Study” finds saving for retirement is the top financial goal for millennial workers (63%), followed by paying off student loans (48%) and paying down credit card debt (42%). These younger workers report taking positive action towards making their goals a reality. Eighty percent say they have a monthly budget and two-thirds have established an emergency savings fund.
The majority of Millennials (58%) believe Social Security benefits will no longer exist by the time they reach retirement age, while one-quarter believe that Social Security will be around but with reduced benefits. Even without the help of the government, 79% of Millennials feel confident they will be better off financially when they reach their parents’ current age.
“This generation has seen parents cope with the recession and the impact of not saving enough. Based on those experiences, they are realistic about the challenges ahead, but optimistic because they plan to take charge of their own retirement nest egg,” says Greg Burrows, senior vice president of retirement and investor services for The Principal, based in Des Moines, Iowa.
When it comes to saving for retirement, 65% of Millennials surveyed for the study say they began at age 25. Yet even with this early start, 63% plan to retire after age 65. Another 22% say they plan on retiring between age 60 and 65.
However, the study also finds nearly half of Millennials (44%) have not calculated the amount of money needed to retire or do not have a set goal. For those with a set goal, more than one-third (34%) want to save $1 million or more.
“While there seems to be a general sense that our generation isn’t being realistic about their financial future, this research shows we are savvy when it comes to money and investing. We’ve started saving earlier than past generations and recognize we may need to work longer in order to meet our financial goals,” says Jase Johnson, voice of the young consumer senior businesses strategist for The Principal. “One way for Generation Y to stay on track is by creating a financial plan and a calculated retirement income and savings goal.”
In order to achieve the American Dream, Millennial workers estimate it will cost $3.1 million in today’s dollars. Millennial workers define the American Dream as being financially secure (77%), having freedom (64%) and owning their own home (63%). Financial independence, marriage and children top their list of dreams.
“Millennial workers are clearly growing up and taking responsibility with a passion and keen focus on their financial future. As the second largest generation to the Baby Boomers and in control of more than $2 trillion in assets, these workers have very quickly become an important group to watch,” says Burrows.
The study was conducted online within the United States between September 9 and 18, 2013, among 591 employees. Ages for participants ranged from 18 to 34. Those participating in the survey work for a company that currently has a workplace retirement plan with the Principal Financial Group.