34% of Millennials say their behind on their retirement savings

Saving for retirement is a critical component of your financial health since you’ll need a way to replace your income when you’re no longer working.

However, a recent Goldman Sachs’ Retirement Survey & Insights Report found that 34% of Millennial respondents report feeling like they’re behind on their retirement savings. The findings are based on responses from 1,566 individuals who responded between July and August 2022.

The last few years have been a time of financial tumult for many individuals. As of April 2020, there were 20.5 million jobs lost as a result of the pandemic. And with inflation running up the costs of many necessities, like food, American individuals are running on even tighter budgets — sometimes, this means foregoing saving for a bit in order to afford something they need.

Of the respondents who said they were behind on their retirement savings, 46% of them reported it was because of financial hardship. Forty-three percent said it was because they needed to step away from the workforce to provide care for a child or aging parent. At times, their savings stagnated for three years or longer.

The stress of making major life changes coupled with volatile economic situations can make saving for retirement feel even more out of reach, but there are a few things you can do to continue making progress toward your retirement savings goals.

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Speak with a financial planner to get clear on your options

A financial planner can analyze your circumstances and your goals to help you find a way to get back on track. They might be able to suggest options you didn’t even know were available to you, while also ensuring that you aren’t making trade-offs that will land you in a more precarious position.

To find a financial planner, you can consider using Zoe Financial, which is a platform that helps you narrow down financial professionals that specialize in the areas you’re most concerned with.

Make sure you’re contributing to your 401(k)

401(k) accounts are employer-sponsored accounts that let you save for retirement while capitalizing on two major things: pre-tax contributions and automated savings. Because you’re contributing a portion of your paycheck before taxes are taken out, you won’t owe taxes until you make withdrawals in retirement. And because this money gets invested for retirement before it even hits your paycheck, you don’t even get the chance to consider using it for something else. This is also the beauty of automatic savings.

The contribution limit on 401(k) accounts for 2023 will be $22,500, up from $20,500 in 2022, which can be very difficult to reach for many people. If you’re unable to reach this limit, just make sure you’re contributing enough to receive your employer’s match so you can grow your balance even faster. By not taking advantage of the match, you would essentially lose out on free money.

If your employer doesn’t offer a 401(k), you can still save for retirement on your own with Individual Retirement Accounts (IRAs), such as the Charles Schwab IRA or Fidelity Investments IRA. These accounts allow you to put your retirement money into a range of investments, and you can set up automatic contributions from a checking or savings account just like with a 401(k).

Charles Schwab

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for active investing through Schwab One® Brokerage Account. Automated investing through Schwab Intelligent Portfolios® requires a $5,000 minimum deposit

  • Fees

    Fees may vary depending on the investment vehicle selected. Schwab One® Brokerage Account has no account fees, $0 commission fees for stock and ETF trades, $0 transaction fees for over 4,000 mutual funds and a $0.65 fee per options contract

  • Bonus

  • Investment vehicles

    Robo-advisor: Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ IRA: Charles Schwab Traditional, Roth, Rollover, Inherited and Custodial IRAs; plus, a Personal Choice Retirement Account® (PCRA) Brokerage and trading: Schwab One® Brokerage Account, Brokerage Account + Specialized Platforms and Support for Trading, Schwab Global Account™ and Schwab Organization Account

  • Investment options

    Stocks, bonds, mutual funds, CDs and ETFs

  • Educational resources

    Extensive retirement planning tools

Terms apply.

Contribute to an HSA

A Health Savings Account (HSA for short) is designed for those who have high deductible health plans (HDHP) to be able to save for upcoming medical expenses. However, HSAs have evolved to also be an account where you can grow your nest egg for retirement.

Your contributions are pre-tax and can be invested within the account — and, all growth inside the account is tax-free. You can also withdraw the funds from your HSA tax-free for qualified medical expenses. You don’t have to wait until retirement to do this but this can be a handy way to save on medical expenses when you do reach those golden years.

If you don’t want to use the money for healthcare-related purposes, you can wait until age 65 so you can withdraw your funds for any reason. There are no penalty fees to do so, but the funds will be subject to income tax. This can be a strategic way to increase your “income streams” in retirement to help you afford more necessities.

Make sure you’re investing for your risk tolerance

Risk tolerance is a measure of an investor’s ability to comfortably stomach losses, and it’s very different for everyone. Understanding your risk tolerance is an important first step in figuring out which stocks, bonds, funds and ETFs are right for you.

Generally speaking, the longer your timeline, the more risk you can take on since your money would have more time to recover if there’s a significant drop in the market. A higher risk tolerance means you can invest in riskier assets that can potentially have a larger return in the long run.

If you’re investing in mostly lower-risk assets when you could really stomach more aggressive assets, your portfolio could wind up missing out on a lot of growth in the long run. This could mean you have a little less of a portfolio balance to cover your expenses in retirement.

If you haven’t already taken your risk tolerance into account, robo-advisors like Wealthfront and Betterment are designed to help you make investments that best suit your goals, time horizon and risk tolerance. They each have IRA account options, which is another form of retirement savings account you can take advantage of.


On Wealthfront’s secure site

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. $500 minimum deposit for investment accounts

  • Fees

    Fees may vary depending on the investment vehicle selected. Zero account, transfer, trading or commission fees (fund ratios may apply). Wealthfront annual management advisory fee is 0.25% of your account balance

  • Bonus

  • Investment vehicles

  • Investment options

    Stocks, bonds, ETFs and cash. Additional asset classes to your portfolio include real estate, natural resources and dividend stocks

  • Educational resources

    Offers free financial planning for college planning, retirement and homebuying

Terms apply.


On Betterment’s secure site

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. For example, Betterment doesn’t require clients to maintain a minimum investment account balance, but there is a ACH deposit minimum of $10. Premium Investing requires a $100,000 minimum balance.

  • Fees

    Fees may vary depending on the investment vehicle selected. For Betterment Digital Investing, 0.25% of your fund balance as an annual account fee; Premium Investing has a 0.40% annual fee

  • Bonus

    Up to $5,000 managed free for a year with a qualifying deposit within 45 days of signup. Valid only for new individual investment accounts with Betterment LLC

  • Investment vehicles

  • Investment options

    Stocks, bonds, ETFs and cash

  • Educational resources

    Betterment offers retirement and other education materials

Terms apply. Does not apply to crypto asset portfolios.

At the end of the day, though, you want to make sure you’re making investment decisions that let you sleep at night.

Bottom line

If economic fluctuations and major life changes leave you feeling like you’re struggling to reach your retirement savings goals, speaking with a financial planner is one of the most important steps you can take to learn more about what your next step should be.

Contributing to pre-tax accounts, like your 401(k) and HSA, can ensure that you’re automating that process of saving for retirement so you can still make meaningful strides toward your goal.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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