Why Millennials Aren’t Investing for Retirement

Is There a Millennial Retirement Problem?

Barron’s September 20th issue mentioned a recent survey that suggests only 43 percent of millennials are saving for retirement. Considering the current job market and its impact on this cohort, we think that’s pretty good. What’s interesting is the additional information that Barron’s shared.

A study co-conducted by BNY Mellon Bank and University of Oxford’s Said Business School found of millennials:

•    55 percent don’t understand retirement plans
•    54 percent are unaware of the tax benefits of a retirement plans
•    62 percent haven’t seen retirement products marketed to them

While we know this is a fraction of the population, we find this information a bit shocking. The very generation that mastered the skill of unlocking iPhones, creating Apps and figuring out how to download enough free music to grab the attention of the FBI seems daunted by retirement saving and planning.

While the current perception of millennials is that they have no jobs and live with mom and dad, new data suggests this is changing. Though slower than a turtle playing keep-away from the dog, the job market is turning around. New data suggests that millennials have finally, though cautiously, started to step into the housing market. They may even redefine the suburbs as hip, again.

Can You Be a Money Conscious Millennial?

These are great trends, though they may be green shoots and not yet plants. The good news is that they’re not still seeds. This suggests that millennials have started to feel more comfortable with their finances and may start to have money to invest.

What millennials daunted by retirement saving and planning should understand is that it’s not hard to start and not hard to learn. It is just a matter of finding simple resources to learn about retirement saving and planning, then executing that plan. Once executed, retirement saving requires minimal effort.

Every definition of financial independence must include a retirement plan. Though millennial’s definition of retirement will differ from their parents and grandparents, they will very likely not to do the same thing 30 to 45 years from now that they do today.

This is where we can help. The goal of The Debt Free Guys is to help everyone become #MoneyConscious and achieve their definition of financial independence. While we are not millennials, one of us is a very, very young GenXer. The fundamentals of retirement saving and planning for all generations are the same.

What will follow the next three Mondays is a three-part series that addresses each of the hurdles mentioned above, lack of understanding of retirement plans, lack of understanding of the tax benefit of retirement plans and the lack of retirement plan products marketed to millennials.

With this series, we will demystify retirement saving and planning for the millennial generation and members of other generations who need the help. The benefits is that you will be able to increase your financial security and prepare yourself for the future you want because, let’s face it, you don’t want to live on mom and dad’s couch forever.

The Debt Free Guys Millennial Retirement Series

Is the awesome life you always dreamed of
still somewhere over the rainbow?

Our FREE #MoneyConscious Financial Planning Guide:
12 Steps to a Richer You eBook will help you get there!

Comment List

  • I have a younger sister, before she doesn’t care about money, as long as she had money to spend then everything is alright. But now, everything changes, she is finding ways on how to earn more money and she is even thinking about investing which really surprises me.

    • John Schneider 20 / 10 / 2014 Reply

      Wow! That’s great to hear. We love that. It seems most of us go through the careless phase. Luckily many of us reach the phase where we care about saving and investing enough to prepare for our own future. Congrats and thanks for commenting!

  • SavvyJames 23 / 10 / 2014 Reply

    The study by BNY Mellon Bank and University of Oxford’s Said Business School should be a real eye-opener … although I’m not too surprised at the numbers. Looking forward to the series.

  • Div Kid 16 / 06 / 2015 Reply

    As a millennial who is saving for retirement, I see no initiative in my peers to learn about finance. I plan to retire at 40 and to achieve this one must start early. Without time on your side this simply will not happen.

    • David Auten 18 / 06 / 2015 Reply

      That is an awesome goal! I think most young people in the past several generations didn’t have any financial guidance. With the increasing costs of every day life, it has put them into a financial hole they can’t get out of until it may be too late.

    • John Schneider 21 / 06 / 2015 Reply

      This concerns us and why we try hard to reach the millennial population. Thanks for visiting and please share with your friends and readers.

  • Janeen 10 / 09 / 2015 Reply

    Interesting. You would think that savvy millennials would have a bit more of a clue. I think (as David said) that a huge piece of the puzzle is the lack of restrained money management on the part of millennials’ parents. Their parents’ generation grew up with careful instruction from THEIR parents (who had gone through the depression and were careful spenders) but largely didn’t pass that information down as they worked hard to create an extravagant life that differed so much from their own beginnings. In essence, millennials were given everything they wanted because their parents were so pleased to be able to do so. Eventually the cycle will revert and begin again as a group is forced to reconsider careful spending (hopefully not due to economic hardship, but likely so).

    • David Auten 10 / 09 / 2015 Reply

      So true. Our context is only what we know. If we don’t learn from our parents and schools, we’ll eventually learn it in life. Our hope is that the louder message millennials are hearing now will resonate. Thanks for reading and commenting.

    • David Auten 12 / 09 / 2015 Reply

      Janeen, you are so spot on there. I remember my dad telling me stories about his dad coming home from work late at night and waking he and his brother up to make sure they didn’t go to bed hungry. My dad swore we would never have to deal with that and we didn’t. Maybe it would have been better if we heard the word No more often.

  • Millennial Money 14 / 10 / 2015 Reply

    The nice thing is that the Millennial Retirement trends have changed over the past year and now approximately 74% of Millennials are saving for retirement if they have access to a 401k account at work.

    • David Auten 14 / 10 / 2015 Reply

      You are right about that. It is nice that Millennials have come of age during a time when most companies with a plan have an auto opt in. I read today about how Gen-Xers are suffering now because of that very reason.

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