By H. Whitman, Special NDG Contributor
Like every generation before them, millennials get criticized by their elders. Some don’t like the fact that millennials are the first generation to be moving back in with their parents after college graduation. They also are cited for overuse of social media like Facebook and texting, letting face-to-face communication take a back seat.
But here’s one fact the criticism doesn’t take into account: Millennials (whose age ranges between 18 and 34) are saving much more for retirement than the generation before them. A recent study by Merrill Lynch showed that 77 percent of Dallas millennials are making saving for retirement a priority over the next year.
Not only that, but they started saving when they were 22. Their savings are higher than those of the Baby Boomers at the same age, and they prioritize retirement much more than previous generations.
Making up for Absent Employers?
The statistics are startling — 77 percent is a large figure. The dedication and intent to save are very admirable, especially as forecasts are that Social Security payments in retirement will increasingly fall short of fully covering living expenses.
It means that millennials are taking a sober look around them at fairly young ages and planning for their future.
That’s highly admirable, especially considering that just 34 percent of Texans have ever attempted to figure out how much they need for retirement.
The long-distance view Dallas millennials are taking could also be spurred by an increasingly smaller number of employers in the area who offer retirement plans for employees. The entire state of Texas is in the lowest 25 percent nationally when it comes to how many workers have access to retirement plans through their jobs.
Texas has company in the states of California and Florida, whose workers are also in the lowest quartile nationally. In Dallas-Ft. Worth itself, 46 percent — nearly half — of people employed in the private sector don’t have access to retirement plans.
That’s sobering news for that 46 percent in general as well, not just for millennials. Dallas-Ft. Worth isn’t at the bottom in the state, though — that distinction belongs to McAllen, where just 23 percent of workers have access to a retirement plan through their job. And our region also does better than either Houston, Austin, San Antonio or El Paso.
In other regions of the country, the rate of access to retirement plans through work is much higher. In Grand Rapids, Michigan, for example, it is more than 70 percent.
The low rate in the Dallas-Ft. Worth area is especially concerning since retirement savings have a major impact on life choices as we age. A large number of retirees are now looking for something beyond the traditional care home or community, with a 2013 poll showing that 84 percent of prospective residents preferred the name “life plan community” instead. This clearly signals a change in how many wish for their retirement years to be spent, preferring an active lifestyle over something more sedentary. As the millennial generation age, it is likely that this will only continue to grow in importance and lifestyle choices will be to some degree determined by the amount of money available.
Saving as a Way of Life
It could be that the low rate of employer retirement plans has caused millennials to be pioneers, just like generations before them. The move-in-with-parents rate allows them to save on rent, perhaps to put those savings toward retirement.
Millennials also work more side hustles — part time jobs in addition to regular employment. Being an Uber
driver. Brokering on EBay. Working for Task Rabbit — and then they save the money.
Our Dallas millennials are to be congratulated, not criticized. They are preparing for non-working years under their own steam and are showing both discipline and foresight. That’s something the rest of us can take a few notes from.