Why Millennials Struggle to Save for Retirement – and Why It Matters

Feel free to reach out to PSG Wealth Adviser Ross Marriner directly.

When investigating the reasons for this trend, the researchers identified a number of common excuses made by the respondents.  These included a lack of money, high expenses and being part of the “sandwich generation,” having to support both their own children and aging parents. Many cited limited access to employer-sponsored retirement plans, particularly for those in freelance or gig-economy jobs. There is also a prevailing belief among some that retirement planning can wait until later in life, a mindset that can lead to significant financial setbacks.

Growing up with the internet and rapid technological advancements, millennials were among the first to adopt digital banking and financial management tools. Budgeting apps, mobile wallets and online investing platforms are part of their everyday financial toolkit. However, their digital upbringing also influences their psychology. The age of instant gratification — fueled by social media, streaming and on-demand services—has made waiting for long-term rewards less appealing. This preference for immediate results can undermine the urgency of planning for events decades in the future.

Moreover, millennial financial priorities often lean more toward life experiences than traditional asset accumulation. Travel, hobbies, and personal development frequently rank above saving for a house or retirement. While this shift in values is not inherently negative, it can delay crucial steps toward long-term financial security. The earlier one begins saving for retirement—even with modest amounts—the more significant the benefits are due to compound interest. If you were to invest R1,000 a month for a 10-year period from 25 until age 35, then stop investing, you will have an investment worth approximately R2,000,000 at age 65, assuming an 8% annual return.  In comparison, if you only started investing R 1,000 per month from age 35 and continued investing for 30 years to age 65, your investment would only have grown to around R1,500,000. 

Despite this, only 6% of South Africans are currently on track to retire comfortably. The remaining 94% may need to continue working beyond retirement age or rely on support from family or the State.

To build a sustainable financial future, consider following the 50-30-20 rule: allocate 50% of your after-tax income to essential expenses, 30% to discretionary spending, and 20% to savings and investments.

A Certified Financial Planner® will be able to assist you to prepare a practical plan to grow your wealth over the long term to ensure that you and your family enjoy a comfortable retirement.