CHARLOTTE, N.C., Aug. 4 (UPI) -- Many millennial said they won't become millionaires in their lifetime and are struggling to save for retirement, a new study found, reflecting "unmanageable" student loan debt and a tough job market.
Nearly two-thirds, or 64 percent, of working millennials, those between the ages of 22 and 35, said they will never accumulate $1 million, a common "nest-egg target to help fund a multi-decade retirement," according to a Wells Fargo & Co.'s study. Some 59 percent have started saving for retirement. Of those who are not saving, 64 percent said they are "not making enough money" to save.
Millennials who earn a starting salary of $32,000 at age 25, saves 5 percent the first year and then increases their savings rate by 2 percent each year (up to 13 percent) could accumulate $1 million by age 65, the survey said.
Overall, millennial cited student loan debt and the gender wage gap as some reasons for a lack of optimism.
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"Saving $1 million is often noted as a nest-egg target to help fund a multi-decade retirement, so we wanted to find out if today's millennials think they can get there. A majority don't think so. Millennials may not realize that if they start saving consistently by their mid-twenties — and stay invested for the duration of their working years — they will likely accumulate $1 million by the time they retire," said Joe Ready, director of Institutional Retirement and Trust for Wells Fargo.
The study found 34 percent of millennials have student loan debt, with a median debt load of $19,978. For those who have debt, 75 percent said their student loan debt is "unmanageable." Yet, of this group, 70 percent are still saving for retirement, at an average savings rate of 5.5 percent, the study found.
The study found millennial men on average earn $39,100 to women in the same age group who earn $28,800. Of that 43 percent of men and 54 percent of women report living pay check to pay check.
"The wage gap between male and female millennials clearly exists, and it's a real issue. It's important that younger women focus on saving and investing now, as this strategy will help put them in good standing for their retirement years," said Ready.
The Wells Fargo Millennial study was conducted by GfK market research and surveyed over 1,000 U.S. adults between the ages of 22 and 35, with an additional sample of 500 Hispanic millennials for comparison purposes.
