Student loans have become more burdensome than ever and paying off student loan debt reigns as the top financial concern for most millennials.
A recent Wells Fargo Retirement Survey focused on “millennials’ attitudes toward savings and retirement.” Market Probe, Inc. surveyed over 1,400 adults between the ages of 22 and 32 from the Ypulse, Inc. online panel and 1,009 baby boomers between the ages of 48 and 66 from the Research Now online panel.
More than half of millennials responded that “they financed school through student loans as compared with only 29 percent of boomers who financed through loans.” So it’s no surprise that when asked what they would do with $10,000, 49 percent of millennials said “the first thing they’d do is pay down student loan or credit card debt.”
As student loan debt piles up on current college students, millennials are questioning the true value of their college education. In fact, 43 percent of millennials “rate the value of their education as a great value” while “45 percent say somewhat of a value.” Interestingly, 31 percent of millennials “feel they would have been better off working, instead of going to college and paying tuition.”
Despite the pressure of cumbersome debt, nearly two-thirds of millennials view themselves as “savers, with 66 percent of men and 56 percent of women describing themselves this way.” Furthermore, 49 percent of millennials say they are saving for retirement, while“51 percent say they have not begun to save but plan to by a median age of 30.”
“I am glad to see about half already saving for retirement, but we’re also seeing that half of this generation has not started to save and is putting it off until the 30s. I can’t stress enough how important it is for this generation to start saving now – the benefits of starting young can’t be recreated later,” said Karen Wimbish, director of Retail Retirement at Wells Fargo.
Many attribute hesitations to save to the unreliable economy. Today, more than half of millennials “say they are not very confident or not at all confident in the stock market as a place to invest for retirement.”
“Millennials say they aren’t confident in the market, but many are already in the stock market. While it is understandable that this generation is wary, millennials have time on their side and a long runway for future growth,” Wimbish said.
Looking toward the future, millennials seem confident. Nearly 67 percent of millennials “believe they will achieve a greater standard of living than their parents.” Similarly, almost three-fourths of millennials “say they feel in control of their future and believe they can achieve their goals.”
“We see a lot of optimism among millennials and a belief in their ability to create a good future,” Wimbish said. “The key for this generation is to put a financial plan into action, so their beliefs become a reality.”
Ali Swee is an intern at the American Journalism Center, a training program run jointly by Accuracy in Academia and its sister organization— Accuracy in Media.
If you would like to comment on this article, e-mail mal.kline@academia.org.