Twenty-somethings are worried about their retirement. How weird is that?

Forty days is long term when you’re in your 20s, while 40 years may as well be next century. And yet, the young adults of Generation Y told us that retirement is their second-most urgent financial worry, just a tick behind affording a house. Give Gen Y an A-plus on personal finance. These kids know what they’re up against.

We’re launching a Gen Y money Web page on Friday for people in their 20s and 30s – check it out at As preparation for this project, we created an online questionnaire that asked young people to tell us their top financial concern, and provide a few personal details.

A small number of the 1,208 responses came from people who are doing well and have no big worries. A few others were more concerned about taxes or government policies than anything happening to them personally. But the vast majority of responses were from people who are struggling to figure out how they fit into a world where home ownership appears unaffordable and where workplace pensions are becoming a perk like a company car was to the previous generation.

It cannot be overstated how appropriate the concern about retirement is. Let’s not get weepy here – millennials aren’t doomed to poverty in retirement. But they will very likely retire later in life than their parents – almost certainly past the age of 65. And, to a larger extent than the previous generation, they will have to invest with discipline and consistency over a long period of time to retire well. Millennials will have the Canada Pension Plan and Old Age Security when they retire, but company pensions won’t be much of a factor.

A related challenge for Gen Y will be finding help with retirement saving. There’s no industry in Canada less in sync with this demographic than banking and investing (okay, cable TV is right up there). Many young adults have a view of high finance that was shaped by the financial crisis of 2008-09. In any case, many millennials simply don’t have enough money to invest to get serious attention from advisers.

Fortunately, tools to help Gen Y invest effectively for retirement are widely available. Low-cost exchange-traded funds are ideal for young investors who want a simple but sound portfolio building block for the long term. They can manage a portfolio of ETFs themselves for nearly nothing at an online broker, or get a robo-adviser to do the management for them at a reasonable cost.

Don’t make the mistake of thinking that putting money away is all you need to do to prepare for retirement, Gen Y. You may need some financial planning at various points in your life to guide your investing, saving and spending. For that, seek out advisers and financial planners who are all about advice and coaching, not selling financial products.

There is something sad about the high level of worry about real estate because some millennials never will afford a house, even as they long to own one. A recent survey about home ownership by Canadian Imperial Bank of Commerce (CIBC) found millennials were slightly more gung ho for owning than the broader population.

The implications of renting for the long term are social and emotional, not financial. We should be clear about that. Renting can mean raising kids in a high-rise building, and accepting that you may never have marble kitchen countertops or a man cave. But you gain the flexibility to easily move closer to work or better schools if it suits you.

Financially, homeowners end up with a house they own outright. Renters who invest the considerable amount of money they save by not owning end with comparable wealth that they can access with much greater ease. Renters don’t pay property tax or condo fees, and they don’t have to replace a roof, repave a driveway or worry that their kitchen design is getting out of date.

Debt is another major area of concern with our Gen Y readers. The best strategy here is to take advantage of low interest rates and get your debts paid off as quickly as possible. Paying down student and credit card debt is a foundation of future financial success.

The Globe and Mail
Published Thursday, Mar. 31, 2016 5:35PM EDT
Last updated Thursday, Mar. 31, 2016 9:23PM EDT