If you’re looking for a glitch in our app-heavy, latte-sipping brave new world this might be it; millennials are spending more on coffee than saving for retirement. Given the well-documented difficulty in foregoing immediate gratification for an intangible benefit years, sometimes decades, away, the findings are distressing, but not surprising.
The news comes from “micro investing” app Acorns, which found roughly half of millennials admitted to choosing the rich, full-bodied goodness over a properly diversified 401k investment. A silver lining, according to the tech platform, is that new products (including theirs) allows consumers to “round up” whatever change is left over from a coffee purchase to then invest.
The survey looked at the spending habits of more than 1,900 Millennials, aged 18 to 25.
Young women had the most problem controlling their coffee spending. Around 44 percent of women in the 18 – 25 age group spend more on their daily cup of coffee than their retirement savings, which is about 10 percent higher than men of the same age.
That isn’t to say millennials are ignorant of the importance of retirement saving. Fully 80 percent of millennials say they would prefer to work for a company that offers a 401k plan, according to another recent survey, this time from Fisher Investments 401(k) Solutions.
However, the same percent (80) failed Fisher’s 401(k) IQ in the Workplace Quiz, which might account for their coffee conundrum. That’s higher than the 70 percent of general respondents who earlier failed the same 401k financial education workplace quiz, missing at least three of the nine basic questions.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
For goodness sakes at least take a look at if half of that money was actually put away regularly what it will be worth by retirement. Say at 6 % return to no less than 4% return…It is possible to do better but you will need professional assistance