There was an impressive jump in the number of Millennials saving at least 5% of their income towards retirement or other long-term financial goals during the last year, a new Bankrate.com survey shows.
Today 62% of Millennials are stocking away at least $5 of every $100 earned, up from 42% last year. The survey further shows just 50% of other generations (ages 30 and older) are saving more than 5% of their pay, putting Millennials in the lead on healthy savings behavior.
“The survey shows an evident migration to higher savings rates,” explains Bankrate.com Chief Financial Analyst Greg McBride, “with 29% of millennials saving more than 10% of their incomes, up from 22% last year. The good news is that many working Americans, millennials in particular, are saving, and saving more than last year. The bad news is that 21% of employed Americans claim not to be saving any of their paycheck—nothing for retirement, nothing for emergencies, and nothing for other financial goals.”
Also positive, the research shows a sizable increase in the number of Americans overall saving more than 10% of their incomes, up from 24% to 28% since last year. “One in six working Americans (16%) is saving more than 15% of their current incomes, up from one in seven (14%) last year,” McBride adds. “The percentage of working Americans saving 5% or less of income dropped, from 28% to 21% since last year.”
Among income groups, higher savings rates predictably skew toward higher incomes and lower savings rates toward lower incomes, the research shows. “But even still, 27% of Americans with an income between $30,000 and $50,000 per year are saving more than 10% of their incomes, besting the 24% of households with an income between $50,000 and $75,000 doing the same.”
The news heading into the end of the first quarter of 2016 wasn’t all positive, however. The Bankrate.com Financial Security Index “was a touch lower, at 102.7, from the February result of 103.0.” Still, this is the third-best reading in the past nine months, McBride observes. “While job security and comfort level with debt are big contributors to improving financial security, rising net worth was the biggest,” he concludes.
Bankrate.com worked with Princeton Survey Research Associates International on the latest survey report, available here.