Young Workers Show Poor Savings Habits
photo credit: Alex Barth
It’s more bad news for the Generation X and Y’ers - it looks like they may have a serious problem when retirement rolls around. In addition to future problems with Social Security, young workers have also shown that they cash out their 401(k) accounts every time they switch employers. And since the average young person will work for seven employers in their lifetime, they many not accumulate enough savings before age 65.
Among Generation X workers — born between 1967 and 1975 — 77 percent claim money is their biggest worry. Similarly, Generation Y workers — born between 1976 and 1987 — 74 percent call money their biggest worry. And though more than half of all Generation X and Y workers stated that saving for retirement is an important goal, 51 percent reported that other financial obligations prevent them from doing so.
So what does that leave? Millions of young workers that know they have to save, that want to save, but don’t save for various reasons, who change jobs an average of seven times in their lives and cash out each 401(k) plan as they go. They’re aware of it, too: about 60 percent said that they knew they weren’t making good financial decisions. While this may seem like a good deal of self-awareness and very little responsibility, experts attribute this to the younger generation’s desire for instant gratification. No longer do they save for short-term purchases or long-term goals, instead maximizing credit and securing funds from wherever necessary.
This entry was posted on Friday, September 26th, 2008 at 5:36 am and is filed under Jobs & Employment. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
