Much has been made about the rising cost of student loan debt and the pressure it has put on the ability for Millennials to save for retirement. Coming out of college and almost immediately owing (in some cases) mortgage-level payments for your education puts you behind the eight ball. The issue has garnered enough attention as to become platform talking points for presidential candidates, and to raise calls for paths to loan forgiveness in order to strengthen future generations’ retirement prospects.
So it may come as a surprise that a recent survey by TD Ameritrade found that debt is NOT the #1 reason cited by Millennials for falling behind on retirement savings. In fact, housing costs is a more common roadblock for that generation.
Partly because of rising rental prices, young people are spending big chunks of their income on housing. That’s especially true for families: 1 in 5 millennial parents reported spending 50-59% of their income on housing, according to a 2016 report from the National Endowment for Financial Education and Parents magazine. And 8% said they’re paying 60-74%. With housing eating up 50% or more of your disposable income, no wonder housing costs have become an increasing burden on a Millennial’s ability to save for retirement.