A new study shows millennials are better savers than boomers, despite the former’s struggle with debt.
The company that conducted the survey, Ramsey Solutions, found that 38% of millennials already know how much money they’ll need to retire.
“According to this study, we’re looking and we’re seeing that younger people—millennials—are starting to utilize the investment tools that are available to them,” Chris Hogan, a financial planner at Ramsey Solutions, told the FOX Business Network’s Charles Payne.
Hogan explained why he believes the study revealed these results.
“Maybe they’re seeing their parents deal with a crunch,” he said. “Maybe they’re seeing their grandparents and they’re looking at this and going ‘hold on a minute. I want to make sure I’m able to do some things for myself and my family later, so maybe this investment thing… there’s some merit to it.’”
Despite the good news, the study found the cost of living to be one of the top five reasons why millennials aren’t saving more for retirement. The second reason was kids activities, while the rest had one common element: debt.
“Number three was student loan debt, number four was credit card debt and number five was mortgage debt. So debt is definitely standing in their way,” Hogan said.
The financial planner offered his own advice as to how millennials can prepare for their retirement.
“If they utilize the right opportunities for themselves they can really grow their money,” Hogan said. “So use the 401(k)s millennials, use your 403(b)s. Start to understand about Roth IRAs and those opportunities. And for goodness sakes, leave money alone once you put it in there and let’s let it grow.”