Economic Skittishness: Millennial Edition

September 13, 2018

"'Millennial" is just another word for '***hole'" a millennial coworker was recently heard saying. "People only use it to convey their disdain for an entire generation."

He might have a point. As another coworker put it, "I seldom hear older people use 'millennial' followed by a happy, fun fact—especially when it comes to retirement preparedness and financial security space. Millennials are drowning in student loan debt, they'll never be able to afford to buy a home, they'd rather spend a day's worth of earnings from their part-time job on a bottomless-mimosa brunch than invest in their retirement, etc."

(We'd argue that there’s a darn good ROI on those bottomless mimosas—but that's a story for another day.)

They have a point, though. Who's painting a positive financial picture for millennials these days? After all, retirement security for this younger generation still feels to be a somewhat unattainable goal, what with media coverage highlighting the demise of traditional pension plans, the shortcomings of Social Security, and the failings of the average American saver. Many young workers don’t have faith in the financial institutions that struggled during the Great Recession, and fear they will never be able to retire.

It's within this context that a recent study from Bankrate on millennials' "economic skittishness" takes on more meaning. What does economic skittishness look like? For one thing, millennials are the only age group to favor cash investments (Gen X, Baby Boomers, and the Silent Generation all favor stocks). You've certainly heard that stocks are the best long-term investment compared to other available options, and that investing a dollar today will make it worth a trillion dollars at retirement (or something like that—it's called compound interest). But if you're anxious about making ends meet now, how willing are you to invest, knowing you won't see that hard-earned money again until decades later?

To add a cruel twist to the story, 62% of millennials plan to retire only when they have enough money, yet 31% aren’t saving for retirement. So what to do to avoid dying with your boots on? Well, you could be fortunate enough to work for Colorado's largest workforce and have access to a hybrid defined benefit plan. Even better, you could also contribute to a low-cost voluntary retirement savings plan to have supplemental income available to you in retirement.

Still no dice? There's still plenty you can do to save for retirement, whatever your situation. Be a Bird charger once a week and put that money into a Roth IRA. Leave your money in a retirement account (or do a direct rollover) when you leave a job or internship—even if it's a small amount—rather than paying a tax penalty to cash it out. Heck, do anything you can to start building a nest egg and getting yourself in the habit of prioritizing saving for retirement. (Hint: Perhaps choose an inexpensive sparkling beverage with natural essences instead of that craft cocktail every once in a while).

Whatever you do, don't be an ***hole. Instead, be a millennial who can proudly defy the conventional wisdom and prepare for retirement with confidence. #YouGotThis 

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