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The cards seem to be stacked against millennials when it comes to making the most of their finances, between inflation now being at its highest rate in nearly 40 years, the cost of owning a home becoming increasingly expensive and student loan debt preventing many from saving for short- or long-term financial goals.
While millennials as a whole are making an effort to save for the future, they are still behind previous generations when it comes to building up their retirement savings. According to Fidelity’s 2020 Retirement Savings Assessment study, millennials (born between 1981 and 1996) ranked higher than Generation X-ers (born between 1965 and 1980) on the retirement preparedness scale, in part because they had increased their savings rate from 7.5% to 9.7% over the past two years.
So why do millennials lag behind their elder cohorts when it comes to retirement savings? Below, Select explores this question further by speaking with Angie Chen, assistant director of savings research at the Center for Retirement Research at Boston College.
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Why don’t millennials have enough saved for retirement?
In a recent Millennials Readiness for Retirement study, conducted in 2021 by the Center for Retirement Research, Chen and fellow researcher Alicia Munnell found that millennials had a lower net wealth-to-income ratio between the ages of 28 and 38 compared to that of previous generations.
“This study I did follows a study we did earlier that showed that they [millennials] were behind on a lot of indicators, including earnings, labor force [participation], marital status and…
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