Studies show the internet generation — millennials born between 1981 and 1996 — is a lot poorer and are saving less compared to Gen X and baby boomers.
Despite being more educated than previous generations, when millennials got into the workforce, the dot-com bubble of 2001 and the Great Recession from 2007-2009 led to an unstable financial start. Student loan debt has also hurt this generation's opportunity to save.
Nonpartisan think tank New America found at the same stage of life, millennials learned 20% less than baby boomers. The Center for Retirement Research's 2021 report found millennials had a lower net-wealth-to-income ratio than previous generations. So how can millennials prepare for retirement as they reach middle age?
Avshalom Gad is a financial adviser at New York Life with more than 20 years of experience. Gad says start saving now. Money compounds due to interest and there's a financial benefit to giving yourself more time to save, even if you start small.
"Even though it's pretty tough for millennials, you are the one that's responsible. If you're not going to do it for yourself, probably nobody will," he said. "You need to have a financial plan, which basically means you need to run the numbers to see 'How much do I need when I get to a certain point?' which means retirement."
Gad recommends millennials find a financial adviser who can help create a financial plan.
"I see a lot of people that don't start because they are still waiting to figure out where is the right place for my money. The fact is that there's a lot of phenomenal places for your money. You just need to be confident in your plan. Find someone you can trust that can help you with that," he said. Advisers don't have to be costly either. Check with your bank, employer, or 401(k) provider for inexpensive or free advice. But Gad says do your research so you know they can be trusted.
The most important takeaway, according to Gad: "Every generation would have their specific challenges. And the bottom line is that it doesn't matter which generation you are. In order to be successful financially, you've got to take responsibility — not wait for anyone else to save you."
Cat Sandoval
