Millennials: On Investing And Retirement

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Move over Baby Boomers. These days all eyes are on Millennials, those young adults between the ages of 18 and 34 who are now America’s largest living generation.1 According to the U.S. Census Bureau, Millennials in the United States number more than 75 million — and the group continues to expand as young immigrants enter the country.1

Due to its size alone, this generation of consumers will undoubtedly have a significant impact on the U.S. economy. When it comes to investing, however, the story may be quite different. One new study found that 59% of Millennials are uncomfortable about investing.2 Another study revealed that just one in three Millennials own stock, compared with nearly half of Generation-Xers and Baby Boomers.3

On the Retirement Front

How might this discomfort with investing manifest itself when it comes to saving for retirement — a goal for which time is on Millennials’ side?  According to new research into the financial outlook and behaviors of this demographic group, 59% have started saving for retirement, yet nearly two-thirds (64%) of working Millennials say they will not accumulate $1 million in their lifetime.  Research showed that the Millennials with the more negative view of the future earn a median income of $27,900 a year.2  Just over a third of this group are putting away more than 5% of their income in a retirement savings account. 

As for the optimistic minority who do expect to save $1 million over time, they enjoy a median personal income that is about twice that — $53,000 — of the naysayers. Two-thirds are deferring more than 5% of their income and 28% are saving more than 10%.2

So despite their protestations, their reluctance to embrace the investment world, and a challenging student loan debt burden, Millennials are still charting a slow and steady course toward funding their retirement.2

For the Record

Here are some interesting facts about Millennials and retirement:

  • The vast majority (85%) of Millennials view saving for retirement as a key passage into becoming a “financial adult.”
  • A similar percentage (82%) said that seeing people living out a comfortable retirement today encourages them to want to save for their own retirement.
  • Those who have started saving for retirement said the ideal age to start saving is 23.
  • Those who are not yet saving for retirement say they will start by age 32.
  • Of those who are currently saving for retirement, 69% do so through an employer-sponsored plan.
  • Three out of four said they do not believe that Social Security will be there for them when they retire.
  • Most would like to retire at age 59 – much earlier than the actual retirement age of the generation before them.

Perhaps what Millennials are forgetting is that time is their greatest weapon in the battle for a successful retirement.  The earlier they start saving, the longer their investment will benefit from tax-deferred growth and the greater the ability for long term compound growth to take effect.  A challenging entrance into the job market during the Great Recession coupled with immense and looming education loans certainly explain the pessimism of this generation.  Couple that with a volatile stock market and insurmountable hurdles to purchase a home, and it becomes clear why some Millennials are reluctant to save for retirement at all! 

However, the longer and broader their retirement savings years, the more these initial setbacks will become just a blip in the radar.  Encourage the Millennials in your life to start saving early, utilize those around them as a financial sounding board, and construct a retirement savings plan early that they can build off for years to come.  By saving now, they may be able to attain that goal of retirement at age 59 after all!


1Pew Research Center, “Millennials overtake Baby Boomers as America’s largest generation,” April 25, 2016.

2Wells Fargo & Company, news release, “Wells Fargo Survey: Majority of Millennials Say They Won’t Ever Accumulate $1 Million,” August 3, 2016.

3The, “Only 1 in 3 Millennials Invest in the Stock Market,” July 10 2016.

The commentary on this website reflects the personal opinions, viewpoints and analyses of Kondo Wealth Advisors, Inc. employees providing such comments, and should not be regarded as a description of advisory services provided by Kondo Wealth Advisors, Inc. or performance returns of any Kondo Wealth Advisors, Inc.  Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Kondo Wealth Advisors, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.