Millennial Dilemma: Home ownership or retirement security?

Millennials are facing an unprecedented financial squeeze: 58% of them feel as if they must choose between homeownership and retirement security, according to an Advisor Authority study, powered by the Nationwide Retirement Institute.

The survey pointed out that as housing prices accelerate ahead of median income wage growth, millennials face a fundamentally different financial environment from their parents,  resulting in their adopting different approaches to wealth building.

Millennials’ wealth-building approaches

Unlike prior generations, said Juan Jose Perez, president of Nationwide Corporate Solutions, millennials are struggling to build wealth through housing. Instead, they are turning toward contribution plans early in their retirement journeys.

“Half of millennial investors told us they have opened retirement accounts like 401(k)s or IRAs, and a quarter said they have opened brokerage accounts,” said Perez. “Additionally, 28% of millennials told us they plan to contribute more to their 401K or employer-sponsored defined contribution plan over the next year, with 23% saying they plan to contribute the maximum amount eligible for an employer match.”

Although they are navigating their prime earning years amid a volatile financial landscape, it’s great to see this generation tapping into the benefit of retirement accounts, Perez added. However, he pointed out, they can take that resourcefulness one step further by partnering with a trusted financial advisor who can help them build on those savings and prepare for major life events with confidence.

Home ownership seen as a challenge

The survey also noted that whereas previous generations used homeownership as a tool to build wealth, many millennials (investors ages 29-44) are struggling to afford housing and view it as a challenge to their retirement savings plan.

This struggle is creating a negative view of retirement attainability in general, the survey said. More than a third (35%) of millennials cited rising housing costs as the biggest obstacle to their retirement readiness, and 46% believe that mortgage or home equity loans pose the biggest threat to their achievement of a secure retirement.

In addition, the survey pointed out that the complexity of today’s financial landscape has driven many millennials to seek professional guidance at unprecedented levels. Of the 45% of Millennial investors who pay to work with an advisor or a financial professional, three-fourths (75%) of them began doing so in the last 12 months.

Takeaways for financial professionals

So, what are the survey’s main takeaways for financial professionals? Perez said that while the complexity of today’s financial landscape has driven millennials to seek professional guidance, more than half (55%) of them still aren’t working with an advisor or a financial professional. “This is an opportunity for advisors to connect with these investors to help them achieve both their short-term and long-term goals,” he said.

In addition, the survey revealed a critical gap between Millennial concerns and advisor perspectives, Perez explained. Advisors are taking a longer view when it comes to retirement challenges, with 82% saying that healthcare costs are a significant factor in millennials’ ability to retire. This is compared to only 13% of millennials who said the same thing.

Also, Perez said, more than a third of advisors (35%) said that the uncertain future of government support programs poses the most immediate challenge to clients’ retirement portfolios, compared to only 6% of millennials.

These findings suggest that millennials can benefit significantly from advisors’ long-term perspective on retirement planning risks, Perez pointed out. “It’s important that advisors ensure they are listening to millennials’ goals and addressing their concerns before offering solutions, regardless of whether those solutions are for immediate or longer-term life events,” he said.

Addressing millennials’ issues

The first – and most important – thing an advisor can do to help millennials address these issues is to listen to their retirement goals – both short-term and long-term, Perez said. “By understanding exactly what they are seeking out,” he added,” you can help them build a holistic financial plan that will ensure they are prepared for a secure retirement. If you’re not sure where to start, the Nationwide Retirement Institute offers resources to help advisors facilitate conversations with their millennial clients.”

Additionally, Perez said, one of the most interesting findings from Nationwide’s survey is that 61% of millennials are open to putting part of their portfolio in an annuity or another solution that provides guaranteed income. “This is a great insight for advisors who may not be thinking about introducing these solutions to younger investors like millennials,” Perez said. “Tapping into an annuity solution – one of the only investment products that provides guaranteed income for life – may give millennials confidence in their ability to retire and meet short-term goals, like purchasing a home.”

The Harris Poll, on behalf of Nationwide, conducted an online survey in the U. S. among 510 advisors and financial professionals and 2,007 investors ages 18+ with investable assets (IA) of $10K+, August 19-September 2, 2025. Among the investors, there were 667 millennials (ages 29-44).

 

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