A majority of employed millennials doubt they will amass the $1 million many experts think they will need to see them through a multi-decade retirement, Wells Fargo reported Wednesday.

Wells Fargo said they were too pessimistic, that if they start saving in their mid-20s and remain invested during their working years, they likely can accumulate a $1 million nest egg by the time they retire.

GfK conducted an online survey in mid-April of 1,005 “general population” millennials ages 22 to 35. Participants needed to be employed, though not in the financial services/banking industry, and a U.S. resident for at least three years.

According to the survey, 64% of working millennials said they would never accumulate $1 million in savings over their lifetime. Fifty-nine percent said they had started saving for retirement, while 41% had not, explaining that they were not earning enough to do so.

Wells Fargo did some math, and found that a millennial who earns a starting salary of $32,000 at age 25, saves 5% in the first year and then increases the savings rate by 2% each year (up to 13%) could accumulate $1 million by age 65.

This outcome assumed that the worker would receive an annual 2% salary increase, be invested in the market and realize a 7% return on the invested assets.

“Making the math work to accumulate savings means that millennials must start saving early in their working lives,” Joe Ready, director of institutional retirement and trust for Wells Fargo, said in a statement.

“Millennials have the power of time on their side and need to embrace it. They can get started by reducing discretionary spending by $26 each week and directing that savings to their 401(k) plan, starting at age 25 — it’s feasible.”

Saving Nevertheless

The poll found that nearly two-thirds of millennials who doubted they would be able to accumulate $1 million reported a median personal income of $27,900, and half of those had started saving for retirement.

Thirty-seven percent said they were putting away more than 5% of their income, and 7% were putting away more than 10%.

The 32% who said they did expect to save $1 million reported a median annual personal income of $53,000. Seventy-seven percent had started saving for retirement, with two-thirds deferring more than 5% of their income, and 28% putting away more than 10%.

Thirty-four percent of millennials in the survey reported student loan debt, with a median debt load of $19,978. Three-quarters of those who had debt said it was “unmanageable.”

Yet, 70% of this group were still saving for retirement, at an average savings rate of 5.5%.

The survey revealed stark differences in the earnings and financial outlook of millennial men and millennial women:

  • Median personal income — $39,100 vs. $28,800
  • Report living paycheck to paycheck — $43% vs. 54%
  • Finances stretched too thin to save for retirement — 50% vs. 61%
  • Don’t believe they can accumulate $1 million in savings — 56% vs. 73%
  • Have already started saving for retirement — 61% vs. 56%
  • Average percentage of income saved — 7.3% vs. 5.7%

“The wage gap between male and female millennials clearly exists, and it’s a real issue,” Ready said. “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.”

Financial Health and Retirement

More than eight in 10 millennials in the survey said saving for retirement was an important part of becoming a “financial adult,” and that seeing people who were comfortably retired inspired them to save more for their own retirement.

At the same time, only 45% said they had “an established routine” for reviewing their finances, and 54% said they had a monthly budget. Of the 46% who did not have a budget, 37% said they did not need one, and 33% said it was not a priority.

Fifty-nine percent of respondents expressed discomfort about investing their money in the current economic climate. More than half said stock market volatility made them worry that they would “lose their retirement savings in the market.”

“The fact that half of millennials have a fear of losing their savings in the market concerns me because being invested in the market at this age is only going to benefit this generation for the future,” Ready said.

“The market has continued to generate returns for the long-term investor, and it is absolutely critical that younger people recognize this.”

Seventy-three percent of millennials in the poll supported auto-enrollment in 401(k) plans, but just 29% said they were offered that option.

Seventy-one percent said they would value a financial coach to help them understand the complexities of their retirement plan.

A quarter of respondents said they were “extremely” or “very” interested in using a gamified app for financial planning or advice, and 16% were similarly interested in using a digital advisory service for financial planning.

The poll found that millennials would like to retire at an average age of 59. How Hispanic Millennials Differ

The survey included an additional oversample of 500 Hispanic millennials for comparison purposes. Wells Fargo noted that about a quarter of the Hispanic population in the U.S. comprises millennials, citing Pew Research Center’s analysis of U.S. Census Bureau data.

It found that key differences exist between the way Hispanic and general-population millennials perceive and make decisions about their finances.

Thirty percent of Hispanic millennials surveyed said they currently provided financial support for two or more generations of their family, compared with 14% of general-population millennials. Even so, 63% of Hispanic millennials said they would “do better than their parents,” compared with 49% of general-population millennials.

Hispanic millennials reported a median personal income of $31,100, $2,700 less than the general population. In addition, their median student loan debt of $10,267 was well below the $19,978 median reported by general-population millennials.

The study found that Hispanic millennials were concentrating on their present-day finances at a higher rate than the general population: 66% said they had a monthly budget, compared with 54% of the general population.

However, Hispanic millennials were saving for retirement at a rate of 52%, versus the general population of 59%. That said, 42% of Hispanic millennials considered saving for retirement a “high priority,” compared with 35% of the general population.