Who needs to have money for retirement when you can spend it now?
Thirty-two percent of young people spend more on clothes each month than saving for retirement. And 37 percent admit they aren’t saving anything at all, says a new survey from LendEDU.
“Albeit a small sample size of just 1,000 millennials, the results of this survey do not paint as bleak of a picture as some may suggest regarding millennial retirement saving habits,” the survey says. “With an average monthly retirement saving of $480 per month, there is certainly room for the generation to improve, but that is certainly not a bad start.”
Respondents noted the savings came from employer-sponsored 401(k)s, savings accounts, or something else. Then they estimated how much they spend per month on common expenses, like coffee, groceries, and more. Here are the frivolous items millennials would rather spend on monthly than save for retirement…
- Coffee and alcohol: 27 percent
- Marijuana and exercise expenses: 11 percent
- Online services like Netflix: 12 percent
Of course, food was a large portion of millennials’ budget. The average young person spends about $281 a month on groceries and $163 a month on dining out. Nearly half of respondents are spending more in restaurants monthly than their future finances.
Coffee, a separate expenditure, runs millennials an average $38 a month. They’re also spending $75 for alcohol and $39 on marijuana monthly. Of the 63 percent of millennials who do save for retirement, the average respondent saves $480 a month.
Millennials are more prepared than we think
Those youngins might seem like they’re spendthrift but they might actually have it together. More than a quarter of millennials have $100,000 saved for retirement right now. Meanwhile, 75 percent of baby boomers have that same amount saved. Keep in mind that baby boomers are on their way out of the workforce while millennials still have decades left to save.
But self-savings isn’t what workers want — regardless of age. Twenty percent of workers would prefer a company give them a set paycheck for life rather than a larger paycheck that had an expiration date.
Because of the overwhelming stress we feel from needing to save money and not being able to earn enough to do so, workers hope to get help from their jobs to situate themselves for later on in life.
And when broken down further, women fear retirement more than men. For one thing: it’ll take them longer to save what a man will in a shorter amount of time thanks to the pay gap. But they’ll also outlive men, so they’ll need to save more money over a longer period of time compared to their male partners and peers.
Despite the fact that we expect to live into the triple digits, most Americans believe they have what it takes to save enough money to last them through their entire lives. Naturally, it’s millennials who believe they will be the most financially prepared for retirement. And who can blame them? They have enough time to get it together that saving for retirement can seem like a viable goal to hit. Even if they’re spending hundreds of dollars a month on clothes, alcohol, and drugs.
Originally published at www.debt.com on September 5, 2018.