One-third of millennials are saving 20% or more of their salaries and they are putting financial freedom ahead of retirement savings as their goal, according to a new survey.
Sixty-three percent of millennials (18-34 years old) are looking to achieve the amount of savings or income necessary to live their desired lifestyle, as compared with 55% of Gen Xers and baby boomers who are saving to leave the workforce, the latest Merrill Edge Report found.
When asked about their top priorities in life, millennials were significantly more likely than their older counterparts to focus on personal milestones of working at their dream job (42% vs. 23%) and traveling (37% vs. 21%), while placing a lower priority on being married (43% vs. 51%) and being a parent (36% vs. 59%) than their older and younger age cohorts. Consistent with that, they would rather travel, eat out and exercise than save for the future.
"Young adults tell us they are willing to do whatever it takes to achieve freedom and flexibility, even if it means working for the rest of their lives. To ensure success, it's increasingly important these younger generations take a hands-on, goals-based approach to their long-term finances and prioritize saving in the short term," said Aron Levine, head of Merrill Edge, in a release.
But for all their spending, millennials also are big savers. As a group, they save 19% of their salaries, as compared with a savings rate of 14% for Gen Xers and boomers, and 12% for seniors. Still, only 15% of millennials think they are doing a 'very good' job at saving.