Enough with the surveys saying millennials need to save more for retirement

A new survey finds many millennials are spending more each month on restaurants, clothes and coffee than they are saving for retirement. It must be a Tuesday.

If you haven’t heard, my generation loves coffee, avocado toast and killing beloved American industries all while refusing to move out of our parents’ house.​

The latest data, a LendEDU poll of 1,000 Americans age 22 to 37, finds that nearly half of millennials are spending more money on restaurants and dining out than they are putting into retirement accounts. Thirty-two percent spend more on clothes than they save, and more than a quarter reported spending more on coffee, alcohol and online streaming services.

Thirty-seven percent aren’t saving for retirement at all.

Before the older generations’ bellyaching gets too loud, keep in mind that 22 to 37 is a huge age range, and factors like employment and income level factor heavily. A 22-year-old could still be in school or working an entry-level position (not to mention likely making student loan payments), while a 37-year-old is more likely earning, and saving, more.

LendEDU reported millennials save an average $480 per month. As Jamie Bosse, financial planner at KHC Wealth Management, pointed out, this would be 11% of income for someone earning $50,000 per year. That’s pretty good!

The same idea applies when making comparisons across generations. Sure, more Gen Xers and baby boomers are saving for retirement, according to Federal Reserve data, but they also are likely earning higher incomes and closer to retiring.

“When I was straight out of college, I was not saving for retirement: I just did not have the liquidity,” said Chris Chen, CEO of Insight Financial Strategists, in an email. “Back in my youth, Starbucks was not on every street corner and we did not buy coffee at the price and quantity we do today (non-millennials included). However, I am sure there were other discretionary items that we spent on.”

If 73% of millennials are actually saving for retirement, they would be doing better than previous generations, Mr. Chen said, though he’s a bit skeptical of the survey’s results. But what worries him much more isn’t young people’s spending habits but the propensity of people of all ages to cash out their 401(k)s when changing jobs.

According to the Fed’s data, 12.5% of people with retirement savings have either borrowed from or cashed out an account.

“It is so shortsighted and destructive it boggles the mind,” Mr. Chen said. “However, it is a reflection of the poor state of financial education much more than it is of a tendency that is specific to millennials.”

The Fed also reports that 28% of all non-retired adults don’t have any retirement savings. So while millennials are doing worse than average, that has more to do with employment status and income than broad assumptions about work ethic or financial literacy.

Let those stereotypes, along with all the others about millennials, die already. Like everyone else, we just want a good job that allows us to live comfortably and pursue our passions and hobbies.

And avocado toast.