Deep thought, in the park

Launching into adulthood is always a complex process. Today’s young people, on the other hand, have it harder than ever before. Fallout from the Great Recession has made it more difficult for many millennials to launch into a full-fledged career and get the start they need in their chosen industries.

Millennial’s are waiting longer to get married. They’re renting, rather than buying homes they simply can’t afford. While 8 in 10 of them admit that they see the importance of saving for the future, only 55% of them have actually been able to set aside money for retirement: their goal is to start doing so by age 35. Unfortunately, the ongoing pressures of living expenses and student loans have added up to make it increasingly difficult for them to meet those financial goals.

Many millennial’s are eager go-getters who want to accomplish great things, both in their industries and for themselves. Unfortunately, there are several factors holding them back—most notably potential financial constraints.

Why aren’t millennial’s saving for retirement?

As many as 84% of millennial’s simply don’t have enough money to save. 56% of them admit that they’re living paycheck to paycheck.

They know that the earlier they start, the more money they’ll have.

They recognize that they won’t have pensions, that they’ll probably live longer, and that Social Security may look dramatically different by the time they’re ready to retire.

They grasp the reality. The problem is, their current financial constraints make it difficult for them to get started down that path. All too many of them are making considerably less, comparatively, than previous generations at similar points in their careers. They took longer to find jobs to begin with. Many of them were in more debt by the time they finally graduated. Unfortunately, all those factors add up to make it incredibly difficult for millennial’s to make those critical financial steps.

The problem with debt

Young people have shown that they have an interest in saving. Unfortunately, debt continues to hold them back. Debt can eat a significant amount of monthly income: credit card debt claims as much as 16% of millennial’s’ paychecks, followed by mortgage debt (15%), student loan debt (12%), auto debt (9%), and medical debt (5%).

As many as half of millennial’s surveyed admit that more than 50% of their income goes directly toward paying off debt. Others admit that they have more immediate priorities than saving at this period of their live—and paying off debt makes the list.

The stock market isn’t a millennial safety net.

Millennial confidence in the stock market was substantially shaken by the recession. Many millennial’s started off hesitant to invest—and the crash associated with the coronavirus may increase that reluctance. Just under half of millennial’s surveyed thought, at the time, that the stock market was the best place to invest—but they may not have substantial confidence that it will generate the returns they will need over time.

Even millennial’s who are investing tend to be very cautions and conservative in their investments. As many as 30% of millennial’s have a quarter or less of their investments in stocks or mutual funds, and those numbers are unlikely to change in the foreseeable future.

How lack of market knowledge influences millennial investment

Unlike previous generations, millennial’s don’t have market knowledge—and by the time they’re able to start investing, they’re often not in a position to ask for advice from older, more experienced investors. They’re new to investing. That makes the ups and downs of the stock market—particularly a stock market that they do not trust to begin with—more disturbing when they do occur. As a result, many millennial’s react and share their stocks too quickly, while an experienced investor might know that it’s usually best to hold shares over a longer period of time.

The net worth of 29-34-year-olds

People in the 29-34 age bracket are adults. Most of them have careers. They need that financial value. In 2001, people in that age bracket had a net worth of an average of $34,643. In 2007, that was $39,635. By 2013, however, that number was just $18,400. These financial differences are challenging millennial’s’ ability to successfully become entrepreneurs or invest in their future.

Are all millennial’s created equal? Equally importantly, does every generation really have the same opportunities as the one before it? A look at these simple statistics shows that millennial’s really are starting off at a disadvantage—and that makes it harder than ever for them to achieve their goals.