Here’s How Much Millennials Have Saved for Retirement — Are They in a Good Place?

Concerned female thinking of problem solution stock photo
fizkes /

Millennials — 26- to 41-year-olds — have been facing a slew of financial challenges, from being burdened by student debt to soaring interest rates and inflationary pressures, while still reeling from the economic impacts of the pandemic. A combination that makes it all very difficult to save and plan for retirement.

Indeed, a new GOBankingRates survey found that about one-third (34%) of younger millennials — 25- to 34-year-olds (with some Gen Zers as well) — have less than $10,000 saved for retirement. What’s even more surprising is that another 34% say they haven’t even started saving fore retirement.  

“If you feel behind on saving for retirement, it’s not too late – you have the power of time and compounding interest on your side,” said Cassandra Rupp, Vanguard senior financial advisor. “There isn’t a goal number to save for retirement, but we recommend all investors save 12% to 15% of their income for retirement, or as much as they can and increase it every year.”

The numbers are even more concerning for older millennials — those in the 35- to 44-year-old age bracket (so some Gen Xers as well) — as 40% of them have not started saving for retirement, and 22% have $10,000 or less saved, the survey found.

“Unfortunately there is no perfect solution here but the good news is that because they are early in their financial grownup lives there is time,” said Bobbi Rebell, author of “Launching Financial Grownups” and founder of Financial Wellness Strategies. “While the math points to the advantages of saving early because of compound interest, sometimes the math does not align with the real financial pressures facing young people.”

For example, Rebell said just because they have not saved a certain amount for retirement does not mean they have the wrong financial priorities — they may be paying down student debt or saving for a home, which has become a very expensive goal these days.

Are You Retirement Ready?

Rebell added that there also needs to be a balance to create financial wellness between the push to boost retirement savings, but not to the extreme that it disrupts millennials’ ability to live their best financial grownup lives now.

How Millennials Can Boost Their Retirement Funds

So what are the steps millennials can take to catch up?

According to Rebell, the best way to start is through automated savings, ideally in a company account like a 401(k) with a match,  that is set up to increase automatically in set intervals so that the increases are gradual and barely noticeable.

Vanguard’s Rupp also pointed out that one step is to open a Simplified Employee Pension Plan IRA (SEP-IRA). For self-employed entrepreneurs and small-business owners who don’t work for a company or aren’t offered an employer retirement plan, the SEP-IRA is an option for retirement savings. Any SEP contributions are tax-deductible, meaning you would pay taxes when the funds are withdrawn, Rupp said.

Roth IRAs are another option as they tax-advantaged retirement accounts that can help all retirement savers plan ahead or catch up.

“With a Roth IRA, you’re investing money that has already been taxed. While you’re not able to deduct those contributions from current taxable income, withdrawals made after you turn 59 1/2 aren’t taxed,” she said.

Of course, given the soaring interest rates that affect everything from credit cards to mortgages, paying debt should also be a priority.

In fact, the survey found that 29% of younger millennials have student loans, 49% have credit card loans; 20% have a mortgage and 24% have medical debt. For older millennials (and some Gen X), the figures are 22%; 50%; 24% and 22%.

Are You Retirement Ready?

“For many people, the first goal is to get out of debt. If you can be out of debt in your 20s, you can spend your 30s saving and investing,” said Jay Zigmont, PhD, CFP, founder of Childfree Wealth. “If it takes you longer, that is also OK, as long as you progress. Paying down debt is a way of saving, and it saves you the interest which on credit cards may be 20% plus.”

Additional findings of the survey show that 18% of the younger millennials have between $10,001 and $50,000 saved, while the figure is 17% for older millennials.

Jumping to the ones who have between $50,001 and $100,000 saved for retirement, there are only a meager 10% for both the younger millennials and the older ones. Finally, a meager 4% of younger millennials have saved more than $100,000, while this figure increased to 11% for older millennials.

All in all, experts agree that for millennials, one thing is on their side: time. So it’s a matter of having a plan in place and sticking to it for the long run. 

More From GOBankingRates

Methodology: GOBankingRates surveyed 1,005 Americans aged 18 and older from across the country on between January 16 and 18, 2023, asking twenty different questions: (1) Do you currently have any form of an emergency fund?; (2) How much do you currently have put away for an emergency fund?; (3) If you faced an emergency (medical, housing, etc.) how would you have to pay for it?; (4) How much do you currently have saved for retirement?; (5) Do you have any of the following debt? (Select all that apply); (6) How much debt (student loans, medical, auto/personal loan, credit card, etc.) do you currently have? (NOT including mortgage); (7) If you have a significant other, how much do you argue about money concerns?; (8) Which money topics do you discuss with your children? (Select all that apply); (9) How often do you discuss personal finance issues with your family and/or friends?; (10)What are the chances, in an average month, of you and your family running out of money before you are paid next?; (11) What worries you most when it comes to your personal finances?; (12) Compared to pre-COVID (before March 2020) are you more or less confident in your personal finances?; (13) If you received an unexpected bonus of $5,000, what’s the first thing you would do with it?; (14) If you won the lottery ($100 million), which of the following would you do with the winnings? (Select all that apply); (15) Would you rather…ask a family or friend to borrow money or max out a credit card?; (16) What would you like to learn more about in order to improve your personal finances?; (17) Do you consider yourself a spender or a saver?; (18) Which categories do you believe you overspend on? (Select all that apply); (19) How much do you spend on self care monthly?; and (20) What is your top financial priority?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.

Are You Retirement Ready?


See Today's Best
Banking Offers