More than half of millennials — 54 percent — surveyed by a Wells Fargo & Co. retirement unit said their "biggest financial concern currently" was longer-term debt, mainly student and credit card debt.
With the cost of college continuing to rise, about 64 percent of the 22- to 32-year-olds surveyed said they paid for school with loans. And 42 percent of the millennials said their debt was "overwhelming," twice the rate of baby boomers who were surveyed for comparison.
The $1 trillion in outstanding student debt and low wages in a persistently weak economy are causing the latest rounds of college graduates to put away less money for retirement. More than half of the young adults surveyed said they hadn't begun planning for retirement.
They find themselves stymied in putting money away for retirement because of their collective $1 trillion in outstanding student debt and their typically low wages. Still, 61 percent of the young adults considered themselves to be savers, the survey found.
The first thing that 49 percent of them said they would do with a financial windfall is pay down student debt or credit card debt. Daily expenses, vacation, health care and retirement, and other short-term debts were lower priorities.
Despite the new burdens, young adults are optimistic. Two out of three of them said they would end up better off than their parents. Three out of four said they have confidence that they could find a similar job if they were fired today, even though the nationwide unemployment rate for young adults is almost 4 percentage points higher than that of the overall population.
"We see a lot of optimism among millennials and a belief in their ability to create a good future," said Karen Wimbish, a Wells Fargo director of retirement. "The key for this generation is to put a financial plan into action so their beliefs become a reality."
The survey also showed that a majority of young adults rely on the advice of their parents when it comes to handling money. In line with other surveys, most millennials called themselves frugal compared with their parents' generation.