You might say Gen Y learned a lesson the hard way from their parents -- they are saving for retirement early in their careers in spite of huge student debt.
A recent survey from TD Ameritrade reported that the financial recession has had a positive impact on the saving patterns of Gen Y.
The TD Ameritrade survey was conducted among 854 working adults across four generations. Some of the findings include:
- One in four Gen Y professionals funnel money into not one, but two different types of retirement accounts -- a 401(k) or 403 (b) plus an IRA on a yearly basis. This compares to just three in 10 Gen Xers who are currently in their 30s and 40s.
- The survey also asked what would you do if you inherited $1 million. Sixty-two percent of Gen Xers and 55 percent of Gen Yers said they would pay off all of their debt, compared to 45 percent of boomers.
What does this mean for HR professionals?
In the book, The 2020 Workplace, we asked our sample of 2,200 working professionals: What type of training would you like to see offered by your company that is not currently offered? One suggestion included financial literacy training.
This makes sense when you consider student-loan debt outpaced credit-card debt in 2011 and is likely to top $1 trillion this year. The average debt for bachelor’s-degree recipients is now $24,000 -- over a 10-year period that's more than $250 per month in loan payments.
This commitment to savings speaks to responsible behavior demonstrated by Gen Y professionals.
Jeanne will be continuing this discussion on the saving patterns of Gen Y when she speaks at the coming TD Ameritrade Institutional 2012 conference, "Shaping The Future Together." Jeanne is speaking about "Learn What Gen X and Gen Y Want in the Workplace."
We will be checking our Twitter feed so send us your questions on this topic to #TDAI2012 and we'll will write a future post on the dialogue and questions about Gen X and Gen Y.