The 83 million-strong Millennial cohort are facing an uphill struggle to appropriately prepare for retirement. Despite the fact that this group is more highly educated than either the baby-boomers or Gen-Xers, they entered the workforce during the last 15 years when the U.S. economy was struggling with two major economic shocks.  This resulted in lower wages at the outset of their careers.

In addition to the lower wages, Millennials find themselves in jobs that don’t provide the same benefits – healthcare and retirement – that previous generations enjoyed, and we know through various studies that people just don’t save for retirement outside of an employer-sponsored plan.  Furthermore, more than 50% of this cohort is burdened with student loan debt, which on average represents more than 1/3 of their earnings.

Furthermore, this cohort is likely to live longer than the Baby-boomers, but will only begin to collect Social Security at age 67, which will be a financial burden for many, especially for non-college educated and lower income workers that have fewer options to remain in the workforce.

Millennials still have a lot of time to reverse their current situation, but they are on average well behind the savings rates of previous cohorts.  In addition, they are marrying later (50% fewer marriages at age 25 than the Baby-boomer generation), and purchasing their first home much later, which is another source of retirement funding.