We Asked 5 Financial Experts: What's the Biggest Threat to Millennials' Retirement Savings?
Millennials, born between 1981 and 1996, are between 29 and 44 years old today. They are the youngest generation alive to remember the 9/11 terrorist attacks in 2001 and they were the youngest members of the workforce in 2008 during the Great Recession.
The generation often scolded for their love of pricey pleasures like Starbucks and avocado toast now finds retirement looming just a few decades away. Only 42% are on track to retire by age 65, according to a survey from Vanguard.
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Given this information, MoneyLion asked five financial experts, "What's the biggest threat to millennials' retirement savings?" The good news? Not one said avocado toast, so go ahead and enjoy your brunch and other little luxuries (in moderation, of course) without guilt.
Here is, they explained, what is really threatening millennials' retirements.
Student Loans
College costs began a slow rise in the 1980s but didn't skyrocket until the 21st century. Tuition and fees increased 60% between 2000 and 2022, according to data from the National Center for Education Statistics. And more than 15% of millennials still had student loan balances as of June 2025, according to Experian.
"Student loans are a big problem for millennials, said Quote.com finance expert Melanie Musson. "Laws that keep loans affordable for lower-income individuals also leave them with just as much debt 30 years after college or graduate school as they had when they left. It's a huge problem to pay toward the loan every month without chipping away at it."
The Real Estate Market
Most millennials were too young to buy a house during the 2008 real estate market crash. Housing costs continued to rise as millennials were finally ready to buy homes. Millennials hold average mortgage debt of more than $320,000, according to Experian data.
"Millennials are juggling mortgages that cost more than their parents' first homes," said Julia Bartak, financial advisor at Edward Jones. "High home prices and high interest rates mean they're devoting larger portions of income to housing than prior generations. There's an emotional response to feeling like all their financial bandwidth is going toward their mortgage, and that can push retirement savings to the back burner."
Credit Card Debt
If you're starting to notice a trend, you're right: Debt is holding many millennials back from properly preparing for retirement. Experian data shows that 77.9% of millennials have credit card debt, with average balances close to $7,000.
"For many millennials, the biggest threat to their retirement is that they are currently living paycheck to paycheck, often due to high levels of debt," said Jay Zigmont, PhD, CFP, founder of Childfree Trust.
The Economy
From the Great Recession to the pandemic, millennials haven't had an easy time with world events and the economy.
"Every time they feel like they have some extra in their income, they're hit with another economic disaster," Musson said. Echoing Zigmont, she noted, "It's impossible to build wealth if you're living paycheck to paycheck."
Christoper Calabro, certified financial planner at CPC Wealth Management, agreed. "The issue is that the middle part of their careers hasn't come with the same financial benefits that older generations had," he said. "Wages haven't matched housing, child care and healthcare cost increases. Basic expenses are taking up a big chunk of their income, so they're not saving consistently. When you fall behind it's hard to catch up, even as a high earner today."
Sandwich Generation Expenses
Millennials, along with the Gen X cohort, also face unique challenges in caring for aging parents while raising children and trying to save for their college education. Calabro called this "double financial pressure," which is one of the many factors getting in the way of retirement savings.
"Saving for themselves comes only after everything else is taken care of," he said.
"Millennials are sandwiched between the declining baby boomer generation and the booming Gen Alpha," said Mawuli Vodi of Financially Present. "They have retiring parents who may or may not be able to support them because they are settling into their own wants. Meanwhile, their Gen Alpha kids require a significant amount of help. Even if all goes well, Gen Alpha may end up living at home with their millennial parents."
Financial Literacy
Millennials may have one element working in their favor as their retirement years approach. The Great Wealth Transfer could redistribute roughly $46 trillion to millennials between now and 2048, according to data from Cerulli Associates reported by Merrill, a Bank of America company.
But even a massive inheritance could be a double-edged sword if not managed properly, Vodi pointed out.
"Receiving money in large amounts without knowing what to do is arguably more scary than receiving no money at all," he said. "With money comes the responsibility of managing it well, protecting yourself and your family. Lack of financial literacy and poor planning is the biggest threat."
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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