Millennials may be a little too optimistic about their financial futures, according to a new study.
Continue Reading Below
The report from Charles Schwab showed that while young adults are incurring high levels of debt and have little knowledge about managing that debt, they still expect that they will be able to retire by the age of 60.
Americans born after 1960 won't be eligible to claim the full benefits of Social Security until the age of 67. They will need to wait even longer to claim maximum benefits.
Meanwhile, on average, young individuals had average savings of $1,628, compared with their debt loads, which averaged $8,003. Millennials between the ages of 21 and 25 had just 15 percent more saved than their younger counterparts belonging to Generation Z (ages 16 to 20), despite having 169 percent more debt, according to the study.
Charles Schwab also found that young Americans had a “troubling lack of knowledge” regarding the difference between good and bad debt, including student loans and mortgages.
However, younger Americans expressed willingness to learn about their financial wellbeing and money management. More than 70 percent said they were interested in learning about how to make enough money to reach their financial goals, while 65 percent wanted to know how to save enough to be set up for retirement.
Seventy-six percent of young adults expect to have better financial futures than their parents.