Millennials, those born between 1980 and 2000, define themselves as a group of resilient, impact-focused digital natives who embrace innovation and desire a world where social causes are at the forefront of the majority of conversations. While the younger generation has a notably different focus in some categories compared to the Baby Boomers and Gen X’ers who came before them, each subset of the population has a common thread tying them together. The need for financial stability in both the short- and long-term is a desire that transcends all generational lines, but not all age groups were presented with the same starting point.

The unfortunate reality is that Millennials were catapulted into a time of economic uncertainty, just as they were finishing up their college degrees and starting the search for their first “real” job. The recession which began in 2008 took a toll on various markets, including housing and labor, and while other generations experienced declines in home values, layoffs at work, and rapidly decreasing investment account balances, they had all been exposed to better financial circumstances in years past. The positive memories of better economic environments allow non-Millennials to keep their eyes on the proverbial prize with more ease than the younger generation, despite having similar monetary objectives.

In addition to only experiencing less than ideal economic circumstances, Millennials face several challenges not commonly found in older generations that prevent them from working toward financial goals early on in life, including the pressing need to save for retirement. A recent study by PriceWaterhouseCooper shows that although some Millennials are saving for retirement, they are doing so at a much lower rate than previous generations due to a variety of factors. Here we examine why younger workers with access to a retirement savings plan are not hitting their ideal savings mark, and how employers can lend a necessary hand in the process.

Obstacles Impeding the Saving Ability of Younger Workers

Student loan debt hit the Millennial generation hard, with two in five aged 18 – 34 currently owing public and private lenders significant amounts. ORC International recently reported that 63% of Millennials have an outstanding student loan balance of $10,000 or more, and more than one-third carries more than $30,000. The reality of these student loan debt balances is stark for younger workers, given that repayment is likely to extend for a decade or more. The PwC report found that a rising number of Millennials feel as though student loan debt negatively impacts their desire and need to meet other financial goals, including retirement savings, and 81% of workers with student debt experience stress both on and off the job because of this obligation. Not only are balances on loans notably high, but borrowers on income-based repayment plans, which offer reduced monthly payments for a period of time, also face accruing interest on their loans. This makes the task of paying off student debt seem impossible for some Millennials without taking on monthly payments they cannot easily afford.

Having student loan debt is not the only issue plaguing Millennial workers’ abilities to save for the lofty goal that is retirement. Many experienced a stagnant job market upon graduation from college, leaving them with fewer options that previous generations. Ultimately, younger workers were inclined to take positions that did not necessarily fit their ideal salary range from the start, and they have remained in what they consider underpaid jobs to this day. But Millennials are partly to blame for their dissatisfaction with salaries – unrealistic compensation expectations set some workers up for disheartening paychecks from the moment they took their first job, and not many have recovered. The stagnant economy over the course of the last decade also contributed to lower wages, and only now are younger workers starting to experiencing an increase in pay as they move to other positions.

The combination of these real components making up the financial lives of Millennials means saving for retirement while acknowledged as a need, is put on the back burner. The PwC report cites that nearly 70% of younger workers are setting money aside through employer-sponsored plans for retirement, but a surprising 51% state they will need to remove some of those funds for future expenses. More astonishingly, 35% of Millennials have already tapped into their retirement coffers to cover unexpected bills, rapidly depleting their savings for the long-term. Without adequate saving for retirement from an early age, millions of Millennials may face the need to work longer or sacrifice other financial goals early on in life, including joining the ranks of homeowners or having children.

An Employer-Based Solution

While the retirement savings picture of the Millennial generation seems bleak, there are steps employers can take to help younger workers get on the right financial track sooner rather than later. Creating and implementing a financial wellness program that focuses on the struggles Millennials experience is a strong step in the right direction. Offering free resources through workshops, seminars, online tools, and educational materials as part of an employee benefit program has proven to be beneficial in improving the financial lives of workers across the board. Financial wellness programs that explain the basics of financial literacy, how to mitigate financial stressors, and the importance of balancing student loans and other consumer debts with savings for short- and long-term objectives also help reduce the distractions many employees face on the job. Implementing a comprehensive financial wellness initiative not only benefits employees, but it also creates a more productive, engaged workforce which improves efficiencies within any organization.

Millennials are often given a bad rap in the media and among current and prospective employers, but the challenges they face in creating financial stability and longevity are real. Employers can do their part to lay the groundwork for well-being among younger and older generations of workers by offering financial wellness programs that address common obstacles and offer realistic solutions.