Millennials aren’t investing their money as much as they should, according to a recent poll by CNBC and Generation Lab.
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Nearly two-thirds (63%) of young adults say the stock market is a great place to invest and build wealth, but 61% stated that they aren’t saving for retirement each month. Additionally, almost half (48%) said that they do not have enough savings to cover more than two months’ worth of living expenses. The survey polled 1,013 people between the ages of 18 and 34 in the U.S. in late January.
Clifford Cornell, a certified financial planner and associate financial advisor at Bone Fide Wealth in New York, explained to CNBC that in general, millennials don’t have much cash saved up.
“That’s very indicative of why more people aren’t saving for retirement, why people want to invest but just generally can’t right now,” he said. “They know they need to have cash reserves. They know they need to have a couple of months’ expenses before they start looking to invest in their retirement accounts.”
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Young Millennials, Older Zoomers Lagging Behind on Retirement Savings
So how much should millennials have invested in the stock market to retire comfortably?
The exact figure really depends on your current income and the lifestyle you want when you retire. Northwestern Mutual’s 2024 Planning and Progress Study found that millennials have an average of $62,600 in retirement savings, per The Motley Fool. By saving on a regular basis and investing in a diversified portfolio, The Motley Fool said you can grow your money enough to afford a comfortable retirement.
To provide a more exact figure, and assuming an average age of a hypothetical millennial at 32, SmartAsset suggested that $10,000 invested into the stock market per year (assuming this millennial started working at age 16, that’s more than $150,000) might be a target goal.
But the millennials who do invest are actually pretty good at it, according to a new report from the Federal Reserve Bank of New York, as reported by Business Insider.
Americans between the ages of 18 and 40, mostly millennials, saw their wealth grow by 80% from early 2019 to late 2023 thanks to rising values of their financial assets and stock market portfolios. From 2019 through 2023, the S&P 500 increased by 90%, according to the New York Fed. Business Insider noted that younger investors are more likely to invest in equities and riskier assets than older adults who are closer to retirement and tend to put their money in safer places, like bonds.
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This article originally appeared on GOBankingRates.com: Millennials Should Have More Than $150,000 Invested in the Stock Market By Now
