Bankrate study: Millennials cite lack of cash, financial education reasons for not investing

Posted at 3:10 PM, Oct 07, 2016
and last updated 2016-10-07 20:04:52-04
Stream Logistics in Scottsdale is a millennial workplace through and through -- millennial leaders, fresh young faces, and a collaborative work environment.  Also, when it comes to enrolling in a retirement plan, not everyone is on the same page.  
"It's kind of a whirlwind (when you're hired), you have a new job and new responsibilities.  That stuff goes out the window a little bit," said Stream Logistics worker Damien Voita.  
Another aspect, he said, is retirement isn't a subject that teachers or professors spend much time on.  The 24-year-old is certainly not alone when it comes to putting off saving.  He's actually in the majority of his age group.  A recent Bankrate survey showed only 18 percent of Americans between 18 and 25 years old are investing in a retirement account.
"There's a process of actually choosing where (the money) is going to be invested and I thought I'd just circle back to that after I ask someone who knows what they're doing," Voita said.
According to Bankrate - the top three reasons for millennials snubbing the stock market are:
1. No money to invest
2. Don't know about stocks
3. Too risky
"It's startling when you look at the national averages," Michael Carlin, president of Wealth Management, LLC in Scottsdale said.  "They should certainly put in enough to get the match or whatever company contribution is coming to them.  People have just looked at the option of saving in their retirement plan and thought now is not the right time, I'll do it in the future and then they don't sign up."
For another Stream Logistics worker, 28-year-old Alison Meador, she credits a good economics teacher for urging her to do it and start early.
"We all have those expenses that come like clockwork every month, but you're paying all these other companies for their services, pay yourself.  Invest in yourself," she said.
Co-founder of Stream Logistics, Carson Holmquist, said about half of his employees are enrolled in the company plan.  As for the ones who aren't, he understands why it may seem infeasible.  Young people have student loans, housing and other debt to worry about when starting out.  Plus, there's simply a lot of confusion around investing.  But bottom line, not contributing enough to get the match the company offers is like saying "no thank you" to a raise. 
"Those are pre-tax dollars, so it's really impactful.  That 8 percent you're contributing over the life of your employment, it adds up really quickly," Holmquist said.
After some thought, and a look how compound interest can mean tens of thousands over decades, Voita said he'll be circling back to that 401k plan paperwork sooner rather than later.
"I think if people saw visual representations of this more often, they probably would take advantage of it," he said.