We’ve all been preached to about saving early, but it seems “generation me” has gotten the message. New research published in Money shows that one in five millennials are saving 15% or more of their paycheck in a 401(k) plan, making them millionaires by the time they retire—this is surprising news considering an earlier survey this year revealed a large savings gap between millennial women and men when it comes to planning retirement. So why are so many millennials so compelled to save? Having grown up during the financial crisis, they felt the money message hit home, and for a huge portion of them, saving is ingrained in their psyche—just as with their grandparents during the Great Depression. While older generations have been credited for saving, none of them began saving as early as millennials do. Compared to boomers, who started saving at around 35 years old, 70% of millennials began their savings plan at just 22 years old.
So how do you become a millionaire by retirement age? According to Meghan Murphy, director of workplace thought leadership at Fidelity Investments, make sure you contribute enough to get the full employer match, “then raise that level by one or two percentage points a year until you are saving 15%.” And just like that, you’re on your way to becoming a millionaire.
To read more about millennials' saving habits, visit Money.
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Millennial Money by Patrick O'Shaughnessy ($19)