Student debt and current spending is keeping millennials from saving enough for retirement, according to a survey by Schwab Retirement Plan Services released Thursday.
The nationwide survey of 1,000 401(k) plan participants revealed the differences in attitude toward retirement savings held by millennials (those under age 35), Generation Xers (those between 35 and 49 years old) and baby boomers (those between 50 and 70 years old).
Of those in the youngest group, 44 percent said they are not saving more because they want to treat themselves to things like occasional dinners out and vacations. Only 34 percent of Gen Xers feel this way and only 29 percent of baby boomers.
Meanwhile, student debt continues to prevent 37 percent of millennials from saving more.
About half of them (49 percent) feel they do not know what their best investment options are, and only 34 percent are extremely or very confident in their ability to make the best 401(k) investment decisions on their own.
However, only 22 percent said they were likely to seek professional investment guidance, and just 7 percent are currently receiving it.
“Managing a 401(k) can often be intimidating for young people who have little to no investing experience,” says Catherine Golladay, vice president of participant services and administration at Schwab Retirement Plan Services. “Our survey found that six in 10 millennials wish there was an easier way to choose the right investments for their 401(k). Getting professional investment advice early on can go a long way toward easing some of this anxiety, boosting confidence and getting people started on the right foot.”
Generation Xers have different priorities. Like millennials, they find their greatest obstacle to saving more for retirement, at least according to 34 percent of them, is their unwillingness to sacrifice their current quality of life, but saving for their children’s education is a close second at 32 percent.
Baby boomers, as the group nearest retirement, are not as prepared as they should be, Schwab says. Thirty-seven percent believe they are not saving enough to retire when they want. One-third do not know how much they should be saving for a comfortable retirement.
But health is a bigger concern to this group than money, the report says. Sixty-one percent are concerned they will not be healthy enough to enjoy retirement, while 39 percent worry they will not have enough money to enjoy retirement.