Knowledge. Shared Blog

October 2019

Millennial Journeys Toward Retirement

To find out how younger generations are saving for retirement and other financial goals, we conducted interviews with millennials who work at Janus Henderson. For our first “Marching to a Million” video, Retirement Director Ben Rizzuto spoke with five colleagues about their views on spending, financial advice, social security, and more.

Key Takeaways

  • Generally defined as the generation born between 1981 and 1996, millennials are the largest and most diverse generation in U.S. history.
  • While millennials are also better educated than previous generations, they are generally thought to be less savvy when it comes to managing their finances.
  • Our interviews with millennial employees at Janus Henderson paint a different picture: In our first “Marching to a Million” video, Retirement Director Ben Rizzuto spoke with five colleagues who are actively engaged in planning for their future.

View Transcript

Caitlin: I think that millennials don’t have an understanding of the market or how investing works. They are very distrustful of it, because they don’t understand it. They understand cash, and so they have their savings in a low-interest saving account with their banks.

Hadley: I think that my generation is pretty generally determined and stubborn and determined in a sense to make their own way. I would say that a few misconceptions about millennials are definitely that we are more eager to rent versus save for a long-term investment and we are definitely more prone to think about more current events rather than future events, such as having a family.

Nadia: I definitely think that people think we spend all our money, that we don’t save anything. I think a lot of people think that we are just like never really going to grow up.

Jerry: They see people getting “Instafamous” and spending all this money and they are like, “Oh, I want to be like that, so I am going to spend all this money,” and then, “Oh wow, I am in debt.” And then also since we don’t rely on cash a lot anymore, we kind of lose track of what we actually have, because it is all on a plastic card. We don’t actually see the cash going down in our wallet.

Ben Rizzuto: Distrustful, immature, hyper-focused on their social media status. Is this how we should be describing millennials? However you describe millennials, this is a group that many of us focus on and worry about. One-quarter of millennials who expect to retire between ages 66 and 75 have no retirement savings account. Whether it is their lack of savings or figuring out how to connect with them and get them engaged, there are a lot of negative trends out there when it comes to the financial futures of this group. But we here at Janus Henderson Investors have found that there are positive stories out there, stories of how young adults are making it work – stories that others may be able to learn from.

Kilian: I learned about saving from a really young age from my parents. They always emphasized the importance of putting away money. I remember one of the ways my parents taught me this was just with a weekly allowance when we were pretty young.

Nadia: My parents were divorced, so I think even more so from that, savings was a bigger thing for me, just because when my parents did get divorced, my mom had to provide for the family and then my dad was also providing. And so, my mom, if she wanted to take us on a trip or if you wanted something extra for school or something like that, she would be like, “You need to save for that.”

Hadley: I grew up with a very strict household, so much so that we actually, you know, we weren’t given an allowance growing up, it was based off of what we were able to earn babysitting and stuff like that as we got a little bit older.

Rizzuto: From the education we get early on to thoughts on the future and retirement, millennials are the largest, best-educated and most diverse generation in U.S. history. The experiences they have had in their relatively short lives have made large impacts on how they view many of the financial goals that America was founded upon.

Jerry: Mostly it was looking around, looking at places I could live after college, saying, “Okay, I can’t afford this, I can’t afford this,” and I could barely scrape by on the apartment that I had through college. So I said, “Okay, I will take the hit to my pride and I will go back with mom and dad and save the rent money.”

Rizzuto: The idea of home ownership and what a successful career looks like have both changed significantly. The U.S. housing market has made rent and home prices increase significantly, just as this group is starting their career. This has led to the idea of the boomerang kid growing significantly over the past few years. Along with that, the gig economy and the increased connectivity we now enjoy allows work to be done anywhere and at any time.

Hadley: Millennials seem to be coming up with all of these crazy ideas and startups and being entrepreneurs of themselves, so I think that we absolutely will be the generation to determine what retirement truly means. I think that it is not one standard, “Well, I stopped working at this age.” I think that it will be a multitude of ways that we will be retiring as millennials.

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