Millennials emerging as “retirement super savers,” Transamerica survey finds

Millennial workers (those born between 1979 and 1996) are emerging as a generation of retirement “super savers,” according to a survey conducted by the Transamerica Center for Retirement Studies® (TCRS).

“Millennial workers are focused on retirement in a big way. Our research found that three out of four are already discussing saving, investing, and planning for retirement with family and friends,” said Catherine Collinson, president of the TCRS. “In fact, Millennials are twice as likely to frequently discuss retirement compared to their parents’ generation.” The survey found that 18% of Millennial workers “frequently” discuss the topic compared to just nine percent of their Baby Boomer counterparts.

Many Millennial workers (41%) expect that they will need to financially support their aging parents (29%) and/or other family members (20%) when they are retired. “Millennials are witnessing firsthand their parents’ retirement perils and are worried that they may need to someday financially support them,” said Collinson.

Moreover, the vast majority of Millennial workers (81%) are concerned that Social Security will not be there for them when they are ready to retire. “Millennials are naturally concerned about the future of their Social Security benefits given current forecasts,” said Collinson. “The first Millennials will start turning 67 more than three decades from now in 2046.”

The survey found that Millennial workers’ household retirement savings dramatically increased from $9,000 in 2007 to $32,000 in 2014 (estimated medians), an increase which may be attributable to the timing of Millennials’ entry into the workforce, access to employer benefits, strong savings rates, and dollar-cost averaging of 401(k) contributions throughout the stock market’s decline and subsequent recovery.

According to the survey, Millennial workers are getting a tremendous head start on retirement savings: 70% are already saving for retirement either through employer-sponsored plans, such as 401(k)s or similar plans, or outside the workplace, and they began saving at an unprecedented age of 22 (median). Among those participating in an employer-based 401(k) or similar plan, Millennials are contributing about 8% of their annual salary into their plans.

However, while the majority of Millennial workers (59%) say they have a retirement strategy, only 13% have a written plan. Among those who have estimated their retirement savings needs, 52% said they had “guessed” and only 10% have used a retirement calculator or worksheet.

Source: Transamerica Center for Retirement Studies, press release, July 15, 2014.

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