The Recession Has Caused Millennials to Make Retirement Saving Mistakes

Life Style

When you grow up during a time of turmoil, it can distort your thinking to the point of learning not to trust a certain institution…or you might get bit!

Can we really blame millennials for not trusting the stock market after the big collapse? During the past decade, millennials either struggled through it themselves or watched their parents fight to keep their homes and jobs during the worse economic disaster since the Great Depression.

The thing is, millennials say they’re confident in investing in the various vehicles, like stocks and bonds. 66% of them say they know what to do, but they seem keener on stuffing that money in a jar in the backyard rather than investing it. In fact, 2/3rds of young adults have decided it’s best to keep their money out of the market and in their own hands.

According to Ryan Bailey, the head of Bank of the West, they’re putting their money at risk by doing this.

“Millennials have been stuffing their savings under the mattress instead of putting their income to work through strategic investments. While this may seem safe, they are putting their goals at risk by keeping cash on hand. While they are young, millennials have time on their side and could be missing an opportunity to grow their savings over a lifetime.”

That might be exactly the thing on their minds. They’re still young and have plenty of time to plan for retirement. We’ve written previously about millennials not so focused on retirement just yet. They’re more invested on digging out of extreme student debt or saving to buy a house.

According to a survey, 65% of millennials say the Great Recession has given them pause to invest in the stock market. This is despite an extremely bullish few years that saw stocks rise to their highest levels in its history. It seemed as if a new record was set every other day, making those who dared to invest quite wealthy.

Still, millennials aren’t too concerned with their future. And it’s just not their age group. 21% of all Americans have no retirement plan or savings at all. Either they can’t afford to save or they aren’t too concerned. That seems to be a major habit of a lot of Americans as the economy gets better…live for today and they’ll worry about tomorrow when it comes.

Due to this fear, the Trump administration wants to make it easier for all Americans to prepare for retirement, either by saving or helping to incentivize employers to provide plans to their employees, with the second round of tax cuts.

Last modified: July 30, 2018