BOSTON (11/12/14)--Adults under age 35--also known as millennials--appear to have a mixed relationship with saving. New data from Moody's indicate the younger generation currently has a savings rate of negative 2%, meaning they are burning through their assets or going into debt.
That compares with a positive savings rate of roughly 3% for those age 35 to 44, 6% for those 45 to 54, and 13% for those 55 and older.
The Moody's data seems to run counter to data released in May by Transamerica, which found that 70% of millennials are already saving for retirement and started at median age of 22 (News Now May 19).
Among millennials who are offered a 401(k) or similar plan, 71% are participating and contribute a median of 8% of their annual salary.
Because of this early start, millennials have amassed an average $32,000 in their 401(k) accounts, according to Transamerica.
According to Moody's, 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.
But the new Moody's data--using a technique developed at the Federal Reserve to combine its Survey of Consumer Finances and Financial Accounts of the United States reports--show how savings rates diverge across demographic groups.
After the recession, the savings rates of those under age 35 climbed to 5.2% in 2009 and even briefly surpassed the savings of those age 35 to 44, according to Moody's.
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.