Although millennials sometimes get a bad rap when it comes to personal finances, Money is reporting some surprising statistics. New data show that millennials have started to save at a rate that is faster than any other generation. The typical 20-year old is setting aside 7.5 percent of their income, up from 5.8 percent in 2013. Millennials are also saving for retirement at younger ages—with the average start age of 22. This will make them better prepared than any other generation who started saving later in life. The average start age for Generation X was 27 and for baby boomers, 35. Most of these young people cite the recession as a reason for them to save more.
While few millennials are cutting back on spending, those with a 401(k) are taking full advantage of the plan. “That intent to save is encouraging,” writes Dan Kadlec. “It suggests young people understand the need to save early and often; that the pension system is likely to offer diminishing financial security for the rest of their working days and they must fend for themselves.” Money recommends that savvy millennials avoid risky investments but attempt to take their finances to the next level. If you're rolling in the dough, it sounds like it could be time for some of you to get a financial planner—congrats!
To learn more about personal finance, read Smart Women Finish Rich.
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