Millennials face an uphill battle to save, according to data from a new survey by Personal Capital on the state of U.S. retirement readiness. The survey finds several financial characteristics of Millennials that make them very different from other generations.
They plan to work fewer years—an average of 15 years—than other generations, and $445,687 is the price tag they’ve attached to their retirement savings goals. Unsurprisingly, they have, at the moment, the least amount saved of all generations in the survey (Baby Boomers, Generation X and Millennials). But there is still a large generational gap in retirement readiness. On average, Baby Boomers have saved $554,805, 125% more than Gen X ($246,924) and over 700% more than Millennials ($68,971).
While they plan to work fewer years, they plan to donate more to charity and spend less on major purchases, such as home ownership, than other generations. On average, Millennials plan to spend just $142,274 on a home purchase—much less than Gen Xers, who plan to spend $686,739. Ranked as the most generous generation of the respondents, Millennials have a goal of making charitable contributions, on average, of $382,485.
Overall, survey respondents plan to spend an average of $345,772 on charitable gifts over the next 35 years, making it one of the top three financial goals. The sum slated for charity is higher than what survey respondents anticipate spending on health care ($303,440) or weddings. The No. 1 goal is education, with 60% of respondents planning to save an average of 149,956 for a four-year college. This is higher than users’ anticipated costs for healthcare ($303,440), home purchases ($295,631) and home purchases ($295,631).
NEXT: Millennials have lofty plans
When it comes to vacations, Millennials have $325,357 of vacation plans by retirement. Some of their goals could be funded by inheritance: Those Millennials who expect to inherit hope it will amount to an average of $1.06 million—twice as much income as from their paychecks.
Personal Capital also examined regions of the country to analyze retirement readiness patterns, and found the East Coast has higher levels of readiness than the rest of the country.
Delaware is the No. 1 most-prepared state for retirement with the highest average amount of savings to date at $286,277. Connecticut comes in second, with an average saved amount of $279,367. Third state: New Jersey, with $272,918 for the average amount saved. On the West Coast, California ranks twentieth, with $227,290.
Personal Capital, a registered investment adviser, is the creator of a personal finance app that aggregates accounts for an overview of income, spending and investments.
Personal Capital analyzed the retirement accounts of 134,022 dashboard users on an anonymized basis. Goal data was compiled from the 8,028 users who set them in Personal Capital's Retirement Planner tool. A link to a map of the U.S. viewed through a lens of retirement readiness is on Personal Capital’s website.