Common Misconceptions About Millennials and Retirement

Millennials are now the largest generation in American history at 83.1 million.

Born between 1982 and 2000, they are mostly in their 20s and early 30s and just beginning their careers.

As is typical with this milestone, they are beginning to save for retirement and invest in their future. Many will be receiving inheritances and amassing their own wealth in the coming decades, becoming a huge potential client base seeking financial assistance.

Millennials in Retirement

Unfortunately, there are still many misconceptions surrounding millennials and retirement, as revealed in a study Security Benefit undertook in conjunction with Greenwald & Associates. What exactly are their financial goals? What’s stopping them from reaching those goals? Don’t millennials have tens of thousands of dollars of student loan and credit card debt? Are they even saving for retirement? Do they make investments online like everything else they do?

Myth: Millennials spend money irresponsibly.

Many articles claim they would rather buy frivolous items (e.g., avocado toast) than put any of it in savings. In reality, this just isn’t true. When asked to choose their top financial goals, here’s what they listed1:

Millennials Savings

When pressed to choose just one, paying off credit card debt was their top choice.

Myth: Millennials are in serious debt.

It’s no surprise that debt is a discussion point when it comes to millennials. The largest obstacles keeping millennials from reaching their financial goals are student loans and credit card debt. In addition, the cost of living in their current location (many millennials prefer large urban centers) and housing and childcare expenses also impact their savings.

As student loans and credit card debt reach their all-time highs, it’s easy to conclude that millennials must be in serious debt. Yet, one third of millennials owe LESS than $15,000 in student debt and two thirds of millennials owe LESS than $10,000 in credit card debt. On average, millennials owe $3,235 less than baby boomers in credit card debt2.

Myth: Millennials aren’t saving for retirement.

Actually, 8 in 10 millennials participate in a retirement plan when it is offered through work, and 4 in 10 millennials are saving even when it is NOT offered through their work.

The key to this, however, is that half of millennials contribute only equal to or up to the employer match. This indicates that millennials understand they should be contributing toward their retirement, but they may not know much more beyond that. Most younger millennials, those in their 20s, are likely to go the independent route and choose their retirement investments by doing their own research online1. Their first instinct is to “Google it,” once again showing that they are open to and seeking advice.

Myth: Millennials don’t invest.

A vast majority (72%) of millennials are at least somewhat interested in using an app for help with investing. Despite that, only a small amount (8%) of millennials are actually using investing apps such as Robinhood, Acorns and Stash. Although millennials are comfortable making retail purchases and even conducting banking transactions online, they are least comfortable making personal investment trades online.

One possible reason for this uneasiness surrounding investing is millennials’ general distrust of Wall Street and the stock market3. They came of age and entered the workforce facing the height, and then aftermath, of the 2008 economic recession. After seeing their parents and grandparents struggle and lose money, millennials have become more self-reliant and have an innate desire to protect their money. They are less interested in taking risks, because they’ve seen the consequences.

Fact: 71% of millennials do NOT work with a financial professional.

Millennials, as a whole, represent a big opportunity for financial professionals. Our research shows that millennials are trying to make the “right” and “safe” choices for their money but may not always have the solutions. While it’s easy to misunderstand millennials, it’s just as easy for them to misunderstand financial professionals. More than half of the millennials who don’t plan to work with a financial professional in the future, won’t because they THINK they don’t have enough income or assets. The second biggest reason they are unlikely to work with a financial professional is because they THINK it costs too much. By providing transparency, especially on your website, about pricing and services offered, you can begin to break through some of the misconceptions millennials have.

If you’re interested in learning more about millennials and engaging them in retirement savings, check out our article, Engaging Millennials.

1Security Benefit Retirement Institute (2017). Engaging Millennials in Retirement Savings. [Study Topic]. Unpublished raw data.
2Experian, Boomers or Millennials: Which Generation Is Hooked On Credit Cards?:
3 Harvard Institute of Politics (2018). Survey of Young American’s Attitudes toward Politics and Public Service. Retrieved from