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1 Out of 5 Millennials Believe They Will Never Retire

AsiaVision / Getty Images
AsiaVision / Getty Images

Many of us in the working world dream of retirement — but a good portion of millennials don’t think they’ll ever make it to this phase of life. A recent GOBankingRates survey found that about 1 in 5 millennials (19.6%) believe that they will never be able to retire — and they have legitimate reasons to feel this way.

Related: Surprising Ways Gen X and Millennials Are Worlds Apart Financially

“There are certainly mounting obstacles for millennials preparing for retirement,” said John Graves, founder and managing partner of G&H Financial Group in North Canton, Ohio. “As a whole, they have less inflation-adjusted real income, more debt and almost zero possibility of a pension. Levels of student loan debt are substantially higher than all previous generations, surpassing even the national credit card debt levels. Many millennials have chosen to forgo home purchases, which will limit their ability to increase overall personal wealth. This means they will need to plan for even more income in retirement to pay for rents and leases, which will also increase over time due to inflation and increasing costs of living.”

And while this sounds grim, Graves still believes that millennials will be able to retire — if they start planning for it ASAP.

“Saving for retirement is difficult, yet it is not out of anyone’s reach,” he said.

Anthony Trias, a certified financial planner with Equitable Advisors (and a millennial himself), says that when it comes to millennials, mindset may be one of the biggest barriers to a successful retirement.

Get Started: 17 Financial Planning Tips to Get Your Retirement Strategy Moving in the Right Direction

“If you believe you can’t retire, it can lead to the confirmation bias that you should YOLO, live for the moment and spend as if there is no tomorrow,” he said. “These expenditures can include extravagant travels, excessive artisan dining experiences and seeking to ‘get rich quick’ by overweighting their investments in highly aggressive vehicles that often receive disappointing returns in the long run.”

While those are some things millennials should not be doing if they ever want to retire, here are some things they should be doing to make their retirement dreams a reality — even if they currently view this dream as unattainable.

Pay Yourself First

“I recommend they save about 10-15% of gross income towards qualified retirement plans, investments and emergency funds,” Trias said.

To ensure millennials actually do this, they should automate the process.

Good Tips: 42 Easy Ways To Save For Retirement

“One of the best ways to save money is to make it automatic,” said Robert R. Johnson, Ph.D., CFA, professor of finance, Heider College of Business, Creighton University. “For instance, have an amount taken out of each paycheck and put directly into an investment fund, [or] one can have a specific dollar amount or salary percentage taken out of each paycheck and put in a retirement plan or savings plan. The biggest advantage of automatic plans is the behavioral underpinnings of the plans. If we are enrolled in an automatic savings plan, inertia and the inherent laziness of people tend to work in our favor. That is, once enrolled in an automatic savings plan, people tend to stay enrolled.”

If your employer offers a 401(k) plan, be sure to take advantage of it.

“Make sure you sign up for your employer retirement plan right away and put in at least enough to get the company match,” said Sarah McGinniss, a financial advisor with Savant Wealth Management in Madison, Wisconsin.

Stick To a Budget

“Be honest about your budget and review it on a quarterly basis,” Trias said. “Really honing in on living expenses vs. excess spending is key.”

Ideally, millennials should be living below their means.

“This means 85% of pre-tax salary for most, 75% if they tithe or give to charity,” Graves said.

Try: 10 Small Changes To Stay On Track With Your Retirement Goals

Focus on Paying Down Debts

“A basic plan starts with aggressively paying off any debts with interest rates higher than 6 or 7%,” Graves said. “For debts below 6% interest rates, millennials are typically better off making the monthly payments and investing the difference. If they can make at least 6% on average on the investment, they will offset the interest paid on the loan, resulting in net savings.”

Manage Financial Risks

For investments, millennials should “manage risk by appropriate diversification among asset classes and various industrial sectors,” Trias said. “Also key is managing their risk by maintaining the appropriate amount of insurance protection: life, disability, long-term care, health, home and auto.”

Watch Out: Downsides of Retirement No One Talks About

Ask for Help

“My biggest piece of advice is to ask for help,” Trias said. “Many millennials are great at what they do and therefore think they can do it all alone. Working with a professional and getting a second opinion can reveal opportunities for improvement that aren’t apparent.”

Leslie Tayne, founder and head attorney at the debt solutions firm Tayne Law Group, agrees, stating that a lack of financial literacy is another one of the major barriers millennials today are facing.

Be Aware: 14 Key Signs You Will Run Out of Money in Retirement

“Various reasons prevent millennials from achieving a comfortable retirement, but not having enough financial literacy is the most prominent reason for the struggle,” she said. “By engaging with a financial planner or an employer’s HR office and seeking advice from those older than themselves, millennials can take that first step to erase fear and form a solid plan.”

Consider an Untraditional Retirement

If the numbers still aren’t adding up, millennials may consider a retirement that doesn’t mean playing golf all day. Some may continue to work part-time or pick up a side gig in retirement.

“While traditional retirement may be out for some, a growing number of millennials are redefining what it means to retire,” said Peter Donisanu, chief financial strategist and president at Franklin Madison Advisors. “This view is visible in the rise of the Financial Independence (FI) and Financial Independence, Retire Early (FIRE) movements. The commonality between these two groups rests in an individual’s ability to live and work on their terms, rather than seeking 30-40 years of gainful employment to retire in a traditional sense.”

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This article originally appeared on 1 Out of 5 Millennials Believe They Will Never Retire