6 Money Mistakes Millennials Are Making That Could Cost Them at 60
Many financial mistakes don't feel like mistakes in the moment. Skipping retirement contributions, passing on life insurance or spending every raise may seem harmless today, but these decisions can compound over decades and leave millennials with less wealth, more debt and fewer options in retirement.
Avoiding a handful of common missteps now can make a significant difference by age 60. Here are some common money mistakes a financial planner said millennials should stop making.
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1. Delaying Retirement Savings
The most expensive mistake is the simplest one: Waiting too long to start saving for retirement.
"Someone who starts saving at 25 instead of 35 can end up with roughly double the nest egg for the same monthly contribution, purely because of how long compounding has to work," said Shawna Bieda, certified financial planner and senior wealth advisor at XML Financial Group.
Some millennials might believe they don't make enough money to start saving for the long term, but even small contributions will compound over time.
"Millennials who tell themselves they'll get serious once they earn more are giving up the most powerful decade they will ever have," Bieda said. "You can't buy that time back later, no matter how much you save in your 50s."
2. Missing Out on Your Full 401(k) Match
If you're not contributing enough to your 401(k) account to get your full employer matching contribution, you're missing out on free money.
"I still see people contributing below the level that captures their full 401(k) match," Bieda said. "Skip a few thousand a year in match for a decade or two, and you've walked away from a six-figure sum by retirement — before you even count the growth on it."
3. Letting Lifestyle Inflation Eat Every Raise
Retirement savings are important, but wealth-building isn't just about how much you save. It's also about what happens when your income grows.
"The raise gets absorbed by a nicer car, a bigger apartment or more subscriptions," Bieda said. "The problem isn't the spending itself — it's that the savings rate never improves. Someone earning twice as much at 45 but saving the same percentage as at 30 has trained themselves into a lifestyle that retirement income will struggle to support."
Instead, increase your savings rate with every raise and bonus you receive.
4. Treating Trading Like Long-Term Investing
Investing is a pillar of wealth-building, but not all investing is the same.
"Easy access to trading has made a lot of people feel like investors when they're really speculating," Bieda said. "Chasing individual stocks, crypto runs and hot tips often means sitting in cash between bets, panic selling in downturns and never letting a diversified portfolio simply grow."
Instead of buying and selling stocks like a game, invest in an index fund and leave it alone for decades.
5. Waiting Too Long To Buy Life Insurance
Millennials are at the point where one income interruption, a disability, a death, or a long illness can derail a household for good.
"[Life insurance] coverage is never cheaper than when you're young and healthy," Bieda said. "Skipping it isn't saving money — it's gambling the entire plan on nothing going wrong for 30 years."
6. Not Having an Emergency Fund
Many millennials lack a real cash cushion.
"Without an emergency fund, every surprise becomes credit card debt, and that debt quietly eats the returns the portfolio is working to build," Bieda said. "People feel this most in their 60s when they arrive at retirement still carrying balances they meant to clear years ago."
None of these mistakes will ruin your retirement overnight, but the repercussions can compound for years. The good news is that each one is fixable — and the sooner millennials make adjustments, the more time they have for those changes to pay off.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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