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According to a new study published earlier this month by NerdWallet, millennial parents (ages 18-34) are set to out-save other generations.
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The study found that millennial parents are contributing a median 10% of their annual income to their retirement savings. Generation X parents (ages 35-54) are contributing a median of 8%, while baby boomer parents (ages 55+) are contributing a median of 5% of their annual income.
NerdWallet’s analysis found that if each generation maintained its rate of savings between the ages of 26 and 67, millennial parents could retire with over $1 million more than baby boomer parents and over $400,000 more than Generation X parents.
Bestselling author of “Retire Inspire” Chris Hogan told FOX Business’ Maria Bartiromo on Monday that he is surprised by the results.
“As you really start to look at it, you really start to understand that [millennials] may have a better start, but the key Maria, are they doing enough? It’s not enough just to be better, they need to make sure they are plugging in and are intentional,” Hogan said on “Mornings with Maria.”
He says that people should realize that “retirement is not an age, it’s a financial number,” and then ask themselves, “What’s my dream and then what can you control right now?”
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The bestselling personal finance author says that it is daily financial decisions that make a difference in saving, such as cutting back in your budget, starting to know the difference between a want and a need and starting to utilizing their 401(k).
The study found that among employed parents currently contributing a percentage of their income to retirement savings, 38% of millennials report contributing more than 15% of their income, compared with just 24% of Generation X and 23% of baby boomers.
Hogan lays out some key points for retirement savings, saying the first job is to “get yourself out of debt” and then “you’ll earn the right to be able to save for later.”