But a survey released this week by Bankrate.com brought some good news. Despite all of these valid reasons for not putting money away, most millennials are saving something: 37 percent were saving 5 percent or less of their pay for retirement, emergencies and other financial goals.
That may not sound like much, but it is more than double the 18 percent of people who said they weren’t saving anything. Plus many millennials are saving much more. Twenty percent said they were stashing 6 to 10 percent of their salaries and about one in five were saving more than 10 percent, according to the survey.
The study supports another idea I brought up last week: That many workers put off saving until they are making more money. About 35 percent of households earning $50,000 to $75,000 a year are saving more than 10 percent of their income. That compares to 19 percent of people making $30,000 to $50,000 and 12 percent of people making $30,000 or less.
Still as I previously reported, even small contributions to a retirement savings account can go a long way when workers give the money time to grow. Many readers shared success stories with setting up savings accounts early in their careers for which they were grateful later on. Some of the contributions talked about were small, about $50 a paycheck.
Indeed, when retirement savings goals are broken down into small steps, they begin to look much more attainable.
Take someone earning $30,000. A 5 percent contribution to a retirement account would amount to less than $30 a week. That may still be a difficult sacrifice for some families, but those who can pull it off would have $1,500 saved at the end of the year and another $225 in annual tax savings if the money goes into a tax-deferred retirement account.
Not bad, when you consider that those small steps would leave them better off than the average household. The median 401(k) balance was $18,433 at the end of 2013, according to the Employee Benefit Research Institute, though savings levels varied widely. Close to 40 percent of participants had account balances of less than $10,000, while roughly 20 percent savers had more than $100,000 saved.