Photo (cc) by 401(K) 2013
Young Americans aren’t saving a dime. Zilch. Nada. Nothing.
The millennial generation actually has a savings rate of negative 2 percent, so they’re spending more than they have, according to Moody’s Analytics.
By comparison, Americans age 35 to 44 have a positive savings rate of 3 percent, those 45 to 54 are saving about 6 percent of their income, and Americans 55 and older have a 13 percent savings rate, The Wall Street Journal reported. The WSJ added:
To be sure, Americans’ savings is still growing in the aggregate. The Commerce Department’s main figures on savings show a nationwide increase in saving since the recession as baby boomers and other older Americans have maintained the cautious savings habits developed during the recession.
Many millennials are cash-strapped and struggling. Despite post-recession economic growth and an improving job market, a number of young Americans are not only saddled with heavy student debt, they’re also facing stagnant wages and limited upward mobility, according to CNN Money.
Things were a lot worse just a few years ago. Millennials had a negative savings rate from 2004 to 2009, bottoming out in 2007 with a deficit of about 15 percent, according to Moody’s.
They recovered in 2009 and managed to stay above water until 2012, when they slipped back into the red.
Millennials’ lack of savings leaves both them and the U.S. economy vulnerable. The WSJ said:
The problems from a lack of savings promise to reverberate for years. Those who don’t save are unlikely to be wealthy in the future, meaning American angst over wealth inequality seems poised to persist if most millennials are unable to save or choose not to.
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