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Economy Clips Saving, Not Spending, of Millennials

Nearly half (48%) of Millennials report the economy most impacts their savings habits, as opposed to their spending or investing habits, and thus far only about a quarter say they have been able to save for retirement.

Overall, more than two in five (42%) Americans say the economy most impacts their spending habits, according to a new survey released by Bank of America and Merrill Edge.

In looking toward 2016, most respondents believe they will be saving more (68%), spending less (67%) and investing more (53%) throughout the year. However, Millennials differ from Gen Xers, Baby Boomers and seniors as they anticipate spending more (61% vs. 26%) as they save more (88% vs. 64%) and invest more (82% vs. 48%) in the coming year, according to the survey of more than 1,000 Americans with investable assets of $50,000 to $250,000.

However good their intentions, most (59%) of Americans set a 2015 goal to save for retirement, but so far this year, less than one-third (31%) achieved that goal, according to the survey. Among those who are saving for retirement, a large majority (89%) are not comfortable putting off this task today, and nearly half (47%) regret not saving more for retirement in the last five years.

The biannual survey also found despite current economic pressures on their finances, the majority of Americans have high aspirations for their retirement years. Half (50%) of those who are saving for retirement want to upgrade their lifestyle in retirement, as opposed to just affording the basics.

However, once they do reach retirement, many would not be willing to sacrifice their lifestyle to minimize expenses — specifically:


  • 54% - moving in with loved ones;

  • 26% - moving to a cheaper area;

  • 23% - moving to a smaller home; or

  • 20% - setting a budget.


Having crossed the threshold into retirement, individuals seem to be less restrictive in their approach to finances. For example, retirees say putting money away is less of a priority than non-retirees. Retirees believe that in 2016 they will invest less, not more (71% vs. 31%) and save less, not more (49% vs. 21%).

Retirees are also notably less likely than those who are not retired to regret superfluous spending habits over the past five years, specifically wishing they had spent less on eating out (17% vs. 46%), clothing (10% vs. 28%), technology (8% vs. 20%), cars (7% vs. 17%) and vacations (5% vs. 19%).

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