If you steadily save a reasonable portion of your income over a long period of time, you’re going to end up with a pile of money. “Saving slowly and methodically while keeping expenses low will generally get you where you need to go,” says Timothy LaPean, a certified financial planner in Minneapolis.
“You don’t need to shoot for the sky. All you need is a long series of incremental wins.”
The millennials in Fidelity’s analysis aren’t super savers. Less than a third have a total savings rate – which includes their contributions, plus company matching dollars – of 15 per cent of their income or more.
Financial planners commonly use that 15 per cent figure as a retirement savings goal. That means more than two-thirds of these millennials aren’t saving “enough” by most standards – or even close to it. The average contribution rate for the group, not including an employer match, is 7.5 per cent.
And millennials also have temptations that prevent them from saving. According to Merrill Edge, their “fear-of-missing-out” (FOMO) mentality is also very apparent in their spending habits. The majority say they are more likely to spend on travel, dining and fitness than save for the future.