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Millennials – Saving by the Numbers

Almost half of all Americans under the age of 30 do not save for retirement. Further, there appears to be a disparity between what many millennials believe to be good financial planning, and what they practice. According to a Wells Fargo Millennial Study conducted early in 2016:

  • 85% of millennials say that saving for retirement is an important part of becoming a “financial adult,” yet only 45% have an established routine for reviewing their finances, and only 54% say they have a budget.
  • 69% of millennials think that having a retirement plan such as a 401(k) is extremely or very important, but only 52% contribute to a retirement plan; only 29% have jobs that offer an employer-sponsored 401(k).
  • Millennials would like to retire at an average age of 59, but most will work until they are at least 75. With a current average life expectancy of 84, millennials will have nine years to “enjoy” retirement.

Financial planners advise millennials should start saving for retirement at 23, but most will not start saving until they are at least 32, in part due to external factors that make saving for retirement particularly difficult for this generation. The 2008 recession caused many millennials to delay the start of a full-fledged career, so they had a late start in saving for retirement.


Other factors negatively affecting millennials are increasing student loan debt and the rising cost of rent. According to research conducted by Nerd Wallet, the average millennial has student loan debt of $35,051, and an average yearly loan payment of $4,239. And according to research from Zillow rents have increased 11% nationally since 2012.

Traditionally, a great way to build assets for retirement is to own a home; however, the average age of a millennial first-time home buyer is 33. Millennials are also hesitant to invest in the stock market, as more than half say that market volatility makes them worry about losing all of their money. Financial planners, meanwhile, recommend a 23-year-old should invest 80% to 90% of retirement funds in a well-diversified stock portfolio.

Still, millennials have that great treasure-time-on their side, which gives them a better shot at a successful retirement than their boomer parents. Options for millennials to save for retirement include proper asset allocation; making the most out of an employer’s matching 401(k) dollars; and (sorry baby boomers) living at home after graduation from college until the age 25.

Although 64% of millennials say they will never accumulate $1 million in savings over their lifetime, the goal is achievable.

According to Joe Ready, Director of Institutional Retirement and Trust for Wells Fargo, “Millennials may not realize that if they start saving consistently by their mid-twenties – and stay invested for the duration of their working years – they will likely accumulate $1 million by the time they retire.”

The Wells Fargo Millennial Study also found that 71% of millennials say they would value a financial coach to help them understand the complexities of their retirement plan.

Most millennials have probably never heard of a probate attorney or trust lawyer, and with good reason-if they have no “estate,” they may reason, why would they need an estate plan? While it’s true that the importance of estate planning increases as we age, once they get married and have children, millennials should consult with an estate planner or trust attorney to establish a trust, wills, powers of attorney for financial affairs, and advance health care directives.

None of the individuals are actual clients, witnesses, attorneys, or parties to actual legal proceedings. Any resemblance to actual persons, living or dead, or actual events is purely coincidental. The individuals who appear on the accompanying photos are dramatizations of fictional clients, witnesses, attorneys, or other parties.

Loren Barr
by Loren Barr
Updated: December 24, 2020

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