New data reveals Millennials are sacrificing traditional wealth-building strategies
Millennials are increasingly feeling caught between two major financial goals: buying a home and saving for retirement. A new Advisor Authority study powered by the Nationwide Retirement Institute reveals that 58% of Millennials believe they must choose between the two, reflecting the growing pressure of rising housing costs and slow wage growth.
Housing costs threaten financial security
Once seen as the foundation of wealth building, homeownership has become a source of financial strain for many Millennials—defined as investors aged 29 to 44. The study found that 35% of respondents view escalating housing costs as the biggest barrier to retirement readiness, while 46% said mortgage or home equity loans are the most significant threat to long-term financial security.
The economic impact has been immediate: 60% of Millennials have modified their retirement plans this year in response to housing expenses. Without relying on real estate appreciation, they are seeking new ways to secure their futures.
Half of those surveyed have opened retirement accounts, such as 401(k)s or IRAs, while 22% have begun investing through brokerage accounts. Nearly three in 10 (28%) plan to increase contributions to employer-sponsored retirement plans, and 23% intend to contribute the maximum amount eligible for a company match.
Despite these proactive measures, concerns remain. About 22% fear their savings will not last more than 14 years into retirement, while 10% report their savings are already diminishing.
“Millennials are navigating their prime earning years in a financial landscape marked by volatile markets, high interest rates and shifting economic norms,” said Juan José Pérez, president of Nationwide Corporate Solutions. “While it’s great to see Millennial investors tapping into the benefit of retirement accounts, partnering with a trusted financial advisor can help them build on those savings.”
A disconnect in priorities
Nationwide’s study also highlights a growing reliance on professional financial advice. Of the 45% of Millennials who work with an advisor, 75% began doing so within the past year. However, a gap persists between investor concerns and advisor perspectives.
Only 9% of advisors view housing costs as a long-term threat to clients’ retirement portfolios. In contrast, 82% cite healthcare costs as a major risk, and 35% point to uncertainty surrounding government programs such as Social Security and Medicare.
Meanwhile, just 13% of Millennials worry about healthcare expenses, and only 6% are concerned about the sustainability of government benefits.
“It’s great to see more Millennials turn to financial professionals,” Pérez said. “However, our survey data shows a disconnect, highlighting an opportunity for advisors to ensure they are listening to Millennials’ goals and addressing their concerns before offering solutions.”
As Millennials continue to seek financial stability, many—six in 10—say they are open to adding annuities or other guaranteed-income products to their portfolios.
“Saving for short-term goals, like buying a house, is important,” Pérez added. “But layering that with preparation for longer-term challenges remains imperative.”
