Millennials are unprepared for retirement: How employers, advisors can lend support

Millennials show a significant lack of confidence in their financial knowledge, highlighting a critical need for comprehensive financial education, according to NOYACK’s 2024 Millennial Wealth survey.

Many millennials avoid working with registered investment advisors, carry a substantial amount of debt, and exhibit a strong preference for alternative investments (ALTs).

“Millennials, raised in a world of promise but facing realities that pull in every direction, often encounter major life transitions with a unique set of hurdles,” said CJ Follini, Founder and CEO of investment firm NOYACK. “They’re carrying unprecedented student debt, thanks to a college-or-bust mindset, and navigating a housing market that’s stacked against them. The 2008 crisis set many back before they even started, slowing down career progression and delaying financial independence—homeownership has become more of a distant goal than a rite of passage.

“This generation also experienced a shift in family dynamics and cultural norms; many are delaying traditional markers like marriage and starting a family, while career paths have become less predictable and more fragmented. The gig economy, once seen as a tool for freedom, can be a double-edged sword, creating income swings that impact financial planning.

“Education hasn’t helped them bridge the gap either. We’ve seen the focus on academic success overshadow real-life skills, leaving practical financial management and wealth-building strategies largely out of the picture. “Meanwhile, social media and the constant comparison game make it easy to feel behind or ‘not enough,’ with every swipe. Millennials aren’t risk-averse by choice; they’re reacting to a world that has repeatedly changed the rules on them. And yes, many are prioritizing mental health, adding another layer to how they approach life’s milestones.

“But … millennials are nothing if not adaptable. They’re finding their way with financial literacy and alternative paths that put more control in their hands. 82.3% are reporting a lack of financial preparedness post-graduation, and many turn to fragmented information online, leading to gaps in critical areas like budgeting, investing, and planning for future goals.”

Here are some key takeaways from the NOYACK survey of 5,087 participants that reveals feelings of financial insecurity and big life goals for millennials:

Financial insecurity and struggling with life transitions — Respondents feel unprepared for major life transitions: many struggle with understanding paychecks and benefits (59.2%), and navigating career growth (67.8%). There is a clear need for educational programs targeting these areas. 70.4% of respondents have student loans or credit card debt, and 89.2% felt unprepared to manage finances post-college graduation.

Employers could play a crucial role in supporting millennials “by emphasizing basic financial education on goals-based investing and specifically, the role alternative investments play within these key goal themes,” said Follini.

“Programs that cover Roth IRAs, Solo 401(k)s for freelancers, and HSAs are especially valuable, helping millennials maximize workplace benefits and build long-term wealth. Given that 55.4% of millennials prioritize diversification, programs introducing alternative investments, like real estate and venture capital, provide meaningful pathways to growth beyond traditional assets.”

Alternative investments on the rise — Alternative investments have become increasingly popular as of late: 25.1% of respondents said they frequently invest in alts, and 38.8% said they occasionally invest in alts. 60.7% said they are interested in Bitcoin or digital asset investing, and the largest factor for influencing investment decisions was “potential for high returns” (41%) followed by “alignment with personal values” (30%).

“We have seen from thousands of survey respondents as well as a few thousand more clients of NOYACK,” said Follini, “that the three most popular alternative investment asset classes for millennials to diversify their portfolio with are: 1) Real estate (either commercial or residential); 2) venture capital (mission driven); and 3) fine art (another indicator millennials invest with their passion and values top-of-mind).

“However, since collectibles are not allowed in any retirement plans, overwhelmingly young adults are adding real estate & venture capital private fund investments into their retirement plants for a blend of growth and income. Fixed income products are anathema to this younger cohort.”

Many millennials actually want to “settle down” — Millennials are interested in big life events often akin to “settling down.” 40.2% of respondents plan to buy a home within the next two years, and 34.7% of respondents are planning to start a family within the next three years. Many are considering marriage, yet 64.8% of respondents believe they need more financial planning for marriage.

Related: The rise of the millennial advisor: How AI is at the forefront of retirement planning

Employers should focus on tools and resources best suited to this age group. “Millennials value flexible, automated tools that seamlessly integrate both conventional and alternative investments,” said Follini. “With 28.1% planning to retire after 70, retirement strategies that include a Roth IRA or Solo 401(k) combined with a diversified portfolio approach support both immediate goals and long-term security. Platforms that facilitate goal-based planning with access to HSAs, traditional accounts, and alternative investments empower Millennials to create a balanced retirement portfolio tailored to their unique goals.

“To support young adults in this process, NOYACK offers a free retirement plan setup that delivers an actionable roadmap incorporating both traditional and alternative investments.”