Don’t Blame Millennials – It’s Harder for Them to Save for Retirement

Each generation gets a little smarter than the last. As to millennials (those currently age 18-35), they understand the importance of saving for retirement at a younger age than their parents or grandparents. The problem is that millennials have greater hurdles than any recent generation.

The first problem is student debt. Unlike earlier generations that had manageable student debt, this generation has relatively larger amounts. In fact, a recent Wells Fargo study of those 22-35 years old found that 75% of millennials with student debt found it unmanageable.

Indeed, a paper by the St. Louis Federal Reserve reports that the “current national rate of serious delinquencies for student loans — defined as 90 days or more overdue — is about 11 percent, nearly double where it was in 2003. That number also could be considerably higher considering that many student loans are in deferment, grace periods or forbearance.”

If we get down to the meat and potatoes of simple paying rent, here’s what millennials face:



When paying rent is a struggle, it’s hard to allocate funds for retirement investing. In fact, it’s not just rent that makes routine finances difficult to manage. As few Americans may realize, the millennials entered their adulthood as the US standard of living started its decline.



The parents and grandparents of millennials generally experienced economies that were increasing the standard of living. Since the Great Depression, this is the first cohort to see a shrinking economic pie.

Among the 32 percent in the Wells Fargo study who expected to reach $1 million in savings, the median annual income was $53,000. This is higher than the median income for the survey participants overall: $39,100 for men, $28,800 for women. Miraculously, more than three-quarters of these “higher income” millennials are already saving for retirement.

Millennial Financial Priorities surveyed and concluded that the biggest financial concerns for millennials are:

• 55% – paying for school
• 47% – day –to –day expenses
• 28% – buying a home
• 22% – funding their retirement
• 20% – paying for healthcare

Clearly, having healthcare coverage is most important. While a typical millennial may not see the need as they are young and healthy, getting hit by a bus is an accident which does not discriminate by age.

For those with dependents, having life insurance would come next.

Then, it would seem reasonable that people in this group would want to start a family and buy a home. In fact, millennials would like to graduate from renting to owning. But the hurdle of buying a home is significant. How is it possible to save a down payment when making ends meet?



Final Thoughts

Hopefully, the parents and grandparents will bequest assets to the millenials generation. The millennials can then hopefully experience home ownership as have previous generations, albeit later in life.

Thereafterlarry-klein, retirement saving can move to the forefront of concerns if retirement will be at all possible for this group.

This post sponsored by Larry Klein, publisher of the Retirement Income Blog for Boomers and Seniors. Larry is a retired CPA(retired) researcher and blogger. His full bio is available at

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.


  1. Thanks for posting this Larry and James. I think it touched on a lot of important key points. But millennials also have some key advantages. While it can be tough to prioritize savings with a low income, today you can get started investing in the stock market with only a few dollars through robo-advisors and other online services. By getting started now compounding can really make a big difference. So thank you for trying to educate others about this important concept!

    • Indeed. For every con that Millennials have working against them, there are likely some pros working in their favor. Thanks for stopping by and sharing your thoughts, my friend.

  2. All reasons I’m passionate about money management and enjoy teaching. It helps me achieve my goals, but it’s much more important to those just trying to get by.

    • Exactly. Those struggling on a day to day basis find it hard – practically impossible – to focus and expend resources on long-term retirement goals.

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