3 Top Retirement Fears for Millennials
Written by
Crystal Mayer
Edited by
Zuri Anderson
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For millennials, the road to retirement has been somewhat challenging.
As the oldest of the generation enters into their mid-40s, the amount of time they have to save to ensure a fully-funded retirement is dwindling. This only adds to the hardship that these millennials have faced.
As explained by the Center for Retirement Research at Boston College, hurdles for the generation began early, with many graduating with insurmountable amounts of student loan debt and careers that began during the Great Recession’s turbulent job market. These early obstacles made it more difficult to build wealth and delayed homeownership.
When surveyed, millennials often express concerns about the ability to return. These fears are frequently exacerbated by headlines cautioning that without action by Congress, the Social Security Administration will be unable to pay full benefits beginning in 2035, just as many millennials are considering retirement.
Luckily, there is some hope on the horizon as the generation has made some headway toward accumulating wealth and preparing for retirement.
Here are what continue to be three of the top retirement fears for millennials and ways to overcome them.
That They Won’t Be Able To Retire
A common fear among almost all generations is that they simply will have to continue working throughout their lifetime due to insufficient savings.
Aaron Cirksena, founder and CEO of MDRN Capital, explained that the most common thing he hears from millennials is the fear that they will never be able to retire. The rough start for millennials does little to help assuage this fear.
“What’s different for them is the fact that they came into the job market around 2008 when the recession hit,” Cirksena noted. “And were told that they had to go to college to be successful, and now they are still struggling and faced with major student debt/loans. This has made them feel unprepared for retirement, causing them to think it is unattainable.”
The good news is that millennials still have time. There are steps that the generation can take to boost their retirement fund before it is too late.
Unlike their predecessors, the generation may not have a pension to fall back on, but they do have access to an unprecedented level of information to help them achieve their goals.
That Social Security Will Run Out
Headlines have also startled millennials. Cirksena said, “They are fearful that Social Security will run out, or that is all that they will have to rely on.”
Compared to other generations, millennials may be acutely aware of the problem that this presents.
According to a trustee’s report released on May 6, the Social Security Administration is projected to be unable to pay scheduled benefits in full beginning in 2035. It would take congressional action to reverse the issue.
While there is little that can be done outside of voting for lawmakers that would make this a priority, millennials do have time to save to offset this shortfall.
That They Have Too Much Debt
Finally, millennials have concerns about the amount of debt that they carry. As reported by The Hill, a 2022 Goldman Sachs survey found that over one-third of millennials were behind on their savings.
Large amounts of student debt with little relief, coupled with exorbitant housing costs and years of high inflation, have added to these fears that as a generation, they carry too much debt to retire comfortably.
Working with an experienced financial advisor can help to alleviate all of these concerns.
“Millennials should not be afraid to invest and not think that it’s too late,” Cirksena explained. “You can always start saving and always start investing. There is no timeline or deadline. An easy thing to do is setting a strict budget. Opening up an IRA and maxing it out, along with your 401(k).”
Additionally, the Center for Retirement Research at Boston College noted that there have been some important financial gains for millennials. The generation’s median net worth has increased generally as a result of a strong housing market but they have also garnered more financial assets. These factors can help make retirement more achievable even with less time to save.
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