Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Eniola Odetunde/Axios

In an age where “ok boomer” is a rallying cry for young people fed up with older people who don’t understand them, stereotypes abound of millennials spending money poorly.

The big picture: Labor economist Teresa Ghilarducci tells Axios that millennials don't behave differently than prior generations — they're just thrust into different circumstances. They’re less likely to be offered pensions or qualify for employer-sponsored retirement plans, so they start saving later in life and accumulate less compared to their predecessors. Two-thirds of millennials have no retirement savings at all.

Why it matters: Millennials are better educated, more diverse than ever and they’re now the largest labor force in America. But they also have a lower net worth and make less than their parents did, and their ratio of wealth to income is projected to remain lower than Gen Xers and Boomers throughout their lives.

  • “I reject any idea that millennials are more or less worried or indulgent,” Ghilarducci says. “I don’t see anything like that in the data.”
  • A Pew report also suggests that external factors — debt, flat earnings and increasing expenses — account for differences in their wealth compared to other generations.
  • The median net worth of millennial households was $12,500 in 2016, while Gen Xers had $15,100 in 2001 and boomers had $20,700 in 1983.

Yes, but: There is a small cut of the millennial population — known as “Super Savers” — who save a significant percentage of their income for retirement.

  • Saving "was a way for us to just get more control" in response to the last recession, Millennial Money creator Grant Sabatier tells Axios.
  • According to a survey by the Transamerica Center for Retirement Studies, 71% of millennials join employer-sponsored 401(k)s or similar plans, if they are offered.
  • And 38% of millennials contribute more than 10% of their income to these plans. They save more than Gen Xers (32%) and similarly to boomers (39%).

A recent study from financial firm Principal examines the habits of “Super Savers” — defined as those who save 90% or more of the IRS maximum or 15% or more of their income for retirement.

  • Their big sacrifices? 41% limit travel, 41% own “modest” homes and 43% drive older cars.
  • Jerry Patterson, senior vice president at Principal, tells Axios that family is one of the biggest influencers: 80% of super savers had parents who saved, and only 5% had parents who lived paycheck to paycheck.
  • Ghilarducci's data also suggests that many young people with large bank accounts “aren’t more prudent than others,” but benefit from inheritances, trust funds and not having student loans.

The bottom line: For millennials, having a lower net worth than their parents is part of their financial reality.

  • Even with many millennials managing to save more for retirement, on a larger level, “it’s meaningless until there are real solutions,” Ghilarducci says, like better retirement plans, cheaper education or even salary raises.
  • One thing most experts agree on is that saving a little, and early on, can still go a long way. “We’ve found that up to about 8%, there are very low opt-outs,” says Patterson. “You’ve got to build that nest egg.”

Go deeper:

Go deeper

Texas AG sues Biden administration over deportation freeze

Texas Attorney General Ken Paxton speaks to members of the media in 2016. Photo: Alex Wong/Getty Images

Texas Attorney General Ken Paxton is suing the Biden administration in federal district court over its 100-day freeze on deporting unauthorized immigrants, and he's asking for a temporary restraining order.

Between the lines: The freeze went into effect Friday, temporarily halting most immigration enforcement in the U.S. In the lawsuit, Paxton claims the move "violates the U.S. Constitution, federal immigration and administrative law, and a contractual agreement between Texas" and the Department of Homeland Security.

Dan Primack, author of Pro Rata
1 hour ago - Podcasts

Carbon Health's CEO on unsticking the vaccine bottleneck

President Biden has said that getting Americans vaccinated for COVID-19 is his administration’s top priority given an initial rollout plagued by organizational, logistical and technical glitches.

Axios Re:Cap digs into the bottlenecks and how to unclog them with Carbon Health chief executive Eren Bali, whose company recently began helping to manage vaccinations in Los Angeles.