Millennials, take a bow. T. Rowe Price says you’ve got better savings habits than baby boomers.
In a study released this week, the investment management firm said millennials (who came after Generation X, who came after those boomers) “recognize that saving for retirement is important and are interested in saving more.”
More millennials than boomers track expenses carefully (75 percent vs. 64 percent), and while boomers are saving “a slightly higher percentage of their salary for retirement,” more millennials “have increased their retirement savings within the past 12 months (40 percent vs. 21 percent).”
“It’s encouraging to learn that millennials are so receptive to saving for retirement and are generally practicing good financial habits,” said Anne Coveney, a senior manager at T. Rowe Price.
“When they have the means to do the right thing, it appears that they often do,” she said.
Among other data in the report:
• Millennials are saving an average of 8 percent of their annual salaries, while boomers are saving an average of 9 percent.
• More millennials (75 percent) than boomers (64 percent) track expenses carefully.
• More millennials (67 percent) than boomers (55 percent) “stick to a spending budget.”
• In case of emergency, more millennials (55 percent) than boomers (17 percent) seek the help of family and friends. Also, millennials are more likely (57 percent vs. 43 percent) to use credit cards for emergencies.
• 74 percent of millennials reported they are more comfortable “saving and investing extra money than spending it.”
• More than half — 59 percent — of millennials set their 401(k) contribution rate to take full advantage of their employer match, and 31 percent take partial advantage.
• 60 percent of millennials agree with the statement: “I expect Social Security to go bankrupt before I retire.”
• And 72 percent of millennials say “they are somewhat or much better off financially that their parents were at the same age.”