At the writing of this article, the S&P 500 has hit a new record high of $4,086, a 53% rebound from the momentary market drop we experienced due to COVID-19 one year ago. In that time we have seen a record increase in first-time investors. According to a Chief Investment Officer Magazine poll of 1,300 investor households, 38% of those polled were new investors, and most of them were under 45 years old marking them as “Millennials”.

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This sudden increase in retail investing and planning for the future by Millennials is no surprise. For years now we have heard of the ongoing student loan debt crisis. The impending doom of rampant inflation and stagnant wage growth. The explosion of sovereign debt that this generation, and those that follow, will be saddled with for the rest of their lives. Each of these crises threatens to overwhelm the new Millennial investor, the young professional just starting their careers, or young couple just   starting their family. When faced with this adversity what is a Millennial investor to do when it comes to looking towards retirement? Most would say the answer, like always, is to adapt.

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A Pew Research Center study in 2019 found that Millennial behavior is already quite different than previous generations. Almost 39% of Millennials ages 25-37 hold a bachelor’s degree or higher, almost 15% more than Baby Boomers when they were the same age. Even though the median income for college-educated workers  has not increased materially since 2001, we know that on average more education correlates with higher incomes. In regards to housing, as of 2018 almost 15% of  Millennials were still living at home and only 16% had moved at all in the past year.   Millennials are also waiting longer to get married, or not marrying with almost 25% of Millennials not being expected to  marry at all when they hit their 40’s and 50’s. Each of these behaviors serves to adjust to a trying financial picture. Becoming better educated means more income on average. Finding affordable housing until it makes sense to upgrade serves to lower cash outflows. Delaying or avoiding marriage and a family also serves to lower cash outflows in many cases.

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As a wealth management firm it is our job to look at this macroeconomic picture and adapt as well. As stewards of wealth and partners in meeting financial goals,    we must think about what can be done to achieve retirement for the Millennial   generation. It is our belief that retirement is possible for the Millennial investor. Many prognosticators spell doom and gloom in the markets, but we see that new technological and business endeavors are created every day. The turn of the century will be known for the dawn of the Worldwide Web and powerful computers.       Perhaps in 50 years they will point to renewable energy, bio-tech, and machine  learning as our growth drivers? That outlook speaks to the necessity that is not only controlling costs now, but saving and investing what dollars are available for the future. It is more important than ever for all generations, but particularly Millennials, to start owning their financial future and doing what can be done to make that future achievable.