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Millennials and Generation X: This Is Why You’re Having Such a Hard Time Saving for Retirement

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David M. Brenner, ChFC®, CLU®

D. M. Brenner, Inc.
Phone : (858) 345-1001
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The 40-year old data scientist, and mother of two, in an apologetic tone, says “I just can’t think about it now. I know I should, but I just can’t right now.” 

A lawyer, 53, and father of a college age son, voices a similar response—“No! I just don’t have the bandwidth.”


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Are these two people, one millennial and one a member of Generation X, responding to a telemarketing sales call with a “great deal”? No, they are simply responding to a question exploring how they are thinking about retirement and if they were actively saving and planning right now. While current events are capturing our imaginations in real time, their impact on the retirement future of an entire generation may not be known for decades.

Amazon-size forests have given their life to the pulp on which volumes have been written explaining why people don’t adequately save and plan for retirement.

There is the literacy argument. People just don’t understand or lack the financial literacy to save, to invest, and to fully comprehend such basics as the miracle and magic of compound interest. 

Then there is the inability of people to envision their “future self.” Simply put, people would rather buy a flat-screen television for themselves today, than save and invest for a future self who is effectively a stranger living in some distant and uncertain retirement universe. Flat-screen TV today or give money to a stranger? For many of us the response is, “What size screen?”

The rising cost of living precludes many from living comfortably, let alone saving. College debt, housing costs, child care expenses, and more make saving difficult to impossible for many. For others, even the notion of planning become unimaginable.

All of these play some role. However, in recent years and days, there is another reason why retirement is not getting its due from people approaching peak earning and savings years. A reason that economists and retirement observers often overlook.

Pure economics—attention economics that is.

People only have so much attention to allocate to issues, problems, and decisions they navigate everyday. Just as an automobile driver has only so much attention to allocate to the road, every distraction detracts from their capacity to operate the vehicle safely. A cellphone call, a cup of coffee, a radio blasting a favorite song, a little one practicing their pitching arm with a chicken nugget—each of these chip away at the driver’s attention and behavior.

Only economists, and those that plan their coffee breaks on a spreadsheet, believe that the average human has unlimited time, attention, and access to perfect information to do the “rational thing”—save, plan, invest. Most of us are simply muddling through. Our agendas are full. Or, as our 53-year-old lawyer emphatically states, “I just don’t have the bandwidth.”

In recent years events have been pushing issues on the personal agendas of millennials and Generation X—now in their prime high stress work and family years—at an unprecedented velocity.

Over the past two years of Covid-19 there has been one fastball after another. Constant uncertainty, illness, death, changing work patterns, Delta, Omicron and other Greek lettered warning shots have commanded our attention. We were all forced to give our attention to the well-being of our loved ones living near and far. However, MIT AgeLab research indicates it was those caught in the middle, older millennials and younger Gen Xers with children and aging parents, that were the most stressed—forcing many to allocate their attention from planning a future retirement to simply getting by today. 

Just as masks began to fall, inflation began to rise. The cost of living is now beyond the level of complaining, now it is beginning to hurt. Attention is being allocated to decisions that are framed around the question of what purchase is a necessity versus what purchase is a nicety? 

And, then there is the uncertainty of Ukraine. Many now ask, how will the tragedy and suffering of millions, thousands of miles away, affect my family? Well beyond economic considerations, the shadow of global conflict with a nuclear superpower is now real to millennials and younger Gen Xers. Generations that had only heard about such geopolitical fears in stories told by older siblings, baby boomers, the Silent Generations and great grandparents who lived through World War II.

Before there can be retirement goal setting, planning, and investment decisions, there must be attention. Attention is the rarest of all asset classes. It cannot be manufactured, grown, or pumped out of the ground. Millennials and many in Generation X are in their peak work, family, caregiving, community, and personal relationship years. Covid-19, inflation, and now geopolitics, is depleting the little attention they have left to plan for retirement.

Joseph Coughlin, PhD, leads the Massachusetts Institute of Technology AgeLab. Researcher, teacher, speaker, and advisor, Coughlin examines the market and societal implications of consumer behavior and technology trends across the generations. His recent book is “The Longevity Economy: Unlocking The World’s Fastest-Growing, Most Misunderstood Market.” 

Write to editors@barrons.com

David M. Brenner profile photo

David M. Brenner, ChFC®, CLU®

D. M. Brenner, Inc.
Phone : (858) 345-1001
Schedule a Meeting