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Are Millennials savers? Conflicting studies say yes and no
Young adults are saving less than older generations, thanks to underemployment, student loan debt and bank skepticism, according to one study, while another says Millennials begin saving at a younger age than any previous generation. - photo by

A new study claiming that young adults are spending more than they are saving has come a few months after a study that said Millennials are saving earlier and more for retirement than any other generation.

“Adults under age 35 … currently have a savings rate of negative 2 percent, meaning they are burning through their assets or going into debt, according to Moody’s Analytics. That compares with a positive savings rate of about 3 percent for those age 35 to 44, 6 percent for those 45 to 54, and 13 percent for those 55 and older,” reported the Wall Street Journal.

Their reasons for the savings deficit are a combination of post-recession banking distrust mixed in with staggering student debt and underemployment.

A negative savings rate “could be interpreted as Millennials plowing all their assets into paying off debt. Moody's points out that average student loan debt stands at $17,200 for Millennials, while their median net worth averages out to just $10,400,” said the financial blog Main Street. Average student loan debt was only $6,100 in 1995.

The Atlantic explained that Millennials are notoriously skeptical of banks, “not surprising for a generation that came of age during the Great Recession and Occupy Wall Street.”

And some Millennials are not saving simply because they don’t have the financial freedom to do so. Widespread under- and unemployment for young adults is partly to blame.

“There’s people who really can’t save because they don’t have the means to save and that’s not a small group of people,” said Shai Akabas, an economist at the Bipartisan Policy Center, to the Wall Street Journal. “If you’re in a $25,000-a-year job and starting a family, it’s going to be very hard to accumulate savings regardless of your consumption decisions.”

This trend could have ramifications for Millennials in the future. “A lack of savings increases the vulnerability of young workers in the post-recession economy, leaving many without a financial cushion for unexpected expenses, raising the difficulty of job transitions and leaving them further away from goals like eventual homeownership — let alone retirement,” the Wall Street Journal explained.

However, the Moody's study conflicts with the Transamerica Center for Retirement Studies' annual retirement survey, released in July, which claimed that Millennials (who are currently working full- or part-time in a for-profit company of 10 or more people) are “an emerging generation of retirement super savers.”

“Some 70 percent of Millennials started saving for retirement at an unprecedented young age, just 22, the survey found. By contrast, the average Boomer began saving at age 35, while Gen Xers got started at 27. Thanks to this early savings start, Millennials have amassed an average $32,000 in their 401(k) accounts, according to Transamerica,” reported Time.

"Millennials are 'much more likely' to be recovered from its economic impact than older generations and 68 percent are confident they will be able to retire comfortably," said Forbes, reporting on the study.

“Millennials have seen what happened to their parents, many of whom lost their jobs and savings in the financial crisis — and they are taking steps to avoid a similar outcome,” Catherine Collinson, president of the Transamerica Center, told Time.

So are Millennials savers or not?

Catherine Rampell of The Washington Post suggested that before making broad assumptions about the Millennial generation, experts should make historical comparisons. "If you look at all of Moody’s data, going back several decades, you’ll notice that young people almost always have had a negative savings rate, with 'dissavings' for earlier generations of youth far worse than that among today’s supposedly irresponsible Millennials," Rampell wrote.

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