Millennials & Money

Financially Optimistic Millennials Aspire to be Millionaires, Retire Early

Even though college, credit-card debt weigh them down

New research fromTD Ameritrade. Visit

June 11, 2018 — OMAHA, Neb.–(BUSINESS WIRE)–Millennials are optimistic about how their lives will play out after college, despite the fact that they have a collective $1 trillion in student loan, credit card and other debt hanging over their heads, according to the TD Ameritrade 2018 Millennials and Money Survey.

“Millennials are graduating at record rates, and it’s great to see that like most previous generations of college students, young people are optimistic about the future. On average, survey respondents expect to land a job in their chosen field and be completely financially independent by age 25,” notes JJ Kinahan, chief strategist for TD Ameritrade. “This is a financially optimistic group that’s feeling positive about the economy, the job market and their own plans. However, they will need to develop saving and investing habits that will help them reach some pretty big goals.”

Redefining Life Milestones for Millennials

“Millennials are a generation that has vastly different attitudes and habits than previous generations. So naturally, their lives and financial milestones after college may look different as well,” explains Kinahan. According to the survey:

  • Half (53 percent) expect to become millionaires at some point
  • One in four said they don’t expect to get married, and nearly that many (24 percent) don’t expect to own a home
  • Nearly a third (30 percent) of millennials don’t expect to have kids
  • Despite the general optimism, two in 10 said they’re never going to be able to pay off their student loans
  • Nearly one in five (17 percent) haven’t yet achieved financial independence from their parents; for those who have, it’s usually moving out of the family home that triggers being financially cut-off.

Planning to Retire Early or Not At All

One milestone in particular is going to need some extra attention. Millennials reported that they expect to retire at age 56 on average (millennial men expect to retire even earlier, at age 53 on average). However, on average, they said they don’t plan to start saving for retirement until age 36, which could be more than a decade after getting their first real job. More than a quarter (28 percent) said they don’t expect to retire at any point.

“One of the greatest investments young people can make in themselves is to start putting money away in their 20s. Because of the power of compounding (Einstein called it the eighth wonder of the world), even with ups and downs along the way, those who start early potentially can end up with more in the end,” explains Kinahan. “Ideally, it would be wise to start right after college, and while some millennials certainly do that, we realize that’s not always possible. Understanding all of the available alternatives, like employer-sponsored retirement accounts or brokerage accounts, can be a step in a right direction. And, if you’re not sure, talk to someone. The sooner you can get started, the better your financial prospects may be.”

Consider this example of someone who begins investing $5,000 a year at age 22 and continues to put that amount of money away until they retire at 67, earning an assumed 6 percent return. They’d end up with twice the money as an investor who did the same thing starting at age 32. It could mean the difference between retiring with half a million dollars versus retiring with $1 million, according to a New York Times analysis1. That’s the power of compound returns.

Saving Habits

Many millennials are making strides and overall, more rate themselves as savers than did in 2016 (70 percent versus 62 percent). Ninety-four percent of millennials said they are saving towards a specific goal – vacation (43 percent) and emergency fund (39 percent) being the top choices.

  • Thirty-eight percent are saving for retirement
  • A quarter (25 percent) have started saving for the education of their children or grandchildren

Pursuing Financial Goals

One of the greatest investments young people can make in themselves is to start putting money away in their 20s, because of the power of compounding (Einstein called it the eighth wonder of the world)

Kinahan offers some financial tips for millennials who may need to look at additional financial strategies to pursue their goals:

  • Don’t delay!
    Waiting to save for retirement can be costly. Giving investments the longest possible time to grow attempts to take advantage of the power of compounding, even with the downturns that take place along the way
  • Know your number
    . Find out how much more you can contribute each year to pursue your retirement goal. For 401(k)s in 2018, employees can contribute a max of $18,500 (up from prior years), likely not a realistic level for most people at this age, but certainly a great goal
  • Tack on an IRA
    . Grads who snag a job with a 401(k) retirement plan and employer match should consider themselves lucky. But a 401(k) is only one piece of the puzzle. Young adults should also consider opening an IRA and making regular contributions
  • Negotiate salary
     An un-negotiated salary is a missed opportunity. You could be leaving money on the table simply by not asking. Of those polled, only half negotiated their salaries or compensation at their most recent job
  • Put windfalls to work
    Try not to get carried away during tax season and bonus season. Windfalls, even small ones, can be an extra splash of cash for your retirement accounts. If you can, think about “spending some, saving some.
  • Get smart
     Only three in 10 millennials (32 percent) said they’re very knowledgeable about investing. Free investing education resources are available that fit every learning style. Tune in to the TD Ameritrade Network if you’re a visual learner, or try some online immersive courses to learn about investing







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Survey conducted by Head Solutions Group
Head Solutions Group (U.S.) Inc., is a leading market research partner for Financial Services companies in North America. With offices in New York, Toronto and Montreal, Head delivers the deep customer insights that increase institutional knowledge and propel business action. TD Ameritrade and Head Solutions Group are separate and unaffiliated firms and are not responsible for each other’s services or policies.
About the Millennials and Money Survey
A 15-minute online survey was conducted with 1,519 American millennials ages 21 to 37 by Head Solutions Group between February 21 and March 7, 2018, on behalf of TD Ameritrade Holding Corporation. The statistical margin of error for the total sample of N=1,519 American millennials within the target group is +/- 2.5 percent. This means that in 19 out of 20 cases, survey results will differ by no more than 2.5 percentage points in either direction from what would have been obtained by the opinions of all target group members in the United States. Sample was drawn from major regions in proportion to the U.S. Census.
Source: TD Ameritrade Holding Corporation