Own a home or fund retirement? For Millennials, it doesn’t have to be a choice

Key takeaways:

• Because of high housing costs, many Millennials feel forced to choose between buying a home and planning for their retirement security. 
• Millennials may understand the importance of saving and investing for retirement, but need guidance from financial professionals on how that translates to financial security. 
• Financial professionals can serve Millennial clients by putting immediate needs such as home ownership in context with their broader financial plan.

10/17/2025 – Home ownership is a milestone for many Americans. Buying a first home is traditionally seen as an important step in life, but it’s also foundational for wealth building strategies. 

Yet, the price of housing today makes it difficult for younger generations to take that step. As the Millennial generation (ages 29-44) struggles with housing affordability, many increasingly see home ownership as a challenge to their future financial security. 

In our latest Advisor Authority survey, powered by the Nationwide Retirement Institute, nearly three in five Millennial investors (58%) said they feel forced to choose between home ownership and having a secure retirement.

These dual objectives aren’t and shouldn’t be mutually exclusive. What’s needed is a fresh approach to financial planning for Millennial investors. 

Many Millennials are actively building wealth right now and expect to be on the receiving end of the great intergenerational transfer of wealth taking place in the coming years. If you’re not working with Millennials today on plans to manage this wealth, you likely will be soon in the future. 

As you guide your Millennial clients, you can recast their present-day challenges into opportunities, but it requires a better understanding of where they are today in relation to their financial future. The goal of financial security throughout retirement doesn’t change from one generation to the next, but the guidance you offer may differ from what was commonplace just a few years ago. 

The Millennial home ownership squeeze

Buying a home has always been a significant financial commitment, even for older generations. But Millennials are living in a different financial climate, and the high price of housing is just one reason why. Average house prices have risen faster than median income wage growth, making it hard for workers to keep pace and for many putting home ownership further from reach. 

Moreover, many in this generation are still carrying education-related debt and may be leery about adding to that burden with a large mortgage. 

Recent fluctuations in interest rates and stock values haven’t helped either. Taken together, these factors have changed how many Millennials view financial planning. More than a third of Millennial investors (35%) cite rising housing costs as the biggest obstacle to their retirement readiness. And almost half (46%) believe mortgage or home equity loans pose the biggest threat to achieving a secure retirement. 

This is a dramatic shift from how clients have traditionally viewed wealth creation, with home equity contributing significantly to a family’s overall wealth. The change is already having real-world effects for Millennial investor savers; 60% have adjusted their retirement plans at least some since the start of 2025 in response to rising housing costs.

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Strengthening Millennials’ shaky confidence

Given the roadblocks to Millennial home ownership, many in this generation are finding other ways to build savings and plan for a financially secure retirement. 

Our survey found that nearly three in ten Millennial investors (28%) plan to contribute more to their 401(k) or employer-sponsored retirement plans over the next 12 months. Around one-quarter (23%) plan to contribute the maximum amount to be eligible for employer-matching contributions.

This greater focus on retirement saving and investing has helped many Millennials boost their confidence in their retirement preparations. This positive outlook, however, currently sits on shaky ground over fears of running out of money during retirement. Among Millennial investors we surveyed, more than a fifth (22%) say they’re concerned their savings won’t last more than 14 years and one in ten say their retirement savings are already dwindling.

As a financial professional, this is a call to action. Your Millennial clients may understand the importance of saving and investing for retirement, but need guidance on how that translates to financial security. 

Moreover, many Millennials could benefit from a financial plan that helps them realize the dream of home ownership and establish a foundation for building lifetime wealth. 

Correct the retirement planning disconnect

Our survey discovered that Millennial investors are increasingly seeking out guidance from financial professionals; 45% said they pay to work with a financial professional, with 75% starting a relationship in the last 12 months.

While that news is encouraging, other results from our survey point to potential blind spots—not only among Millennial clients but with financial professionals, too. The source of the blind spots is disconnect between client and advisor—Millennials focus on immediate challenges like housing costs, while financial professionals take a longer view.

Let’s look at housing as an example. While a majority of Millennial investors see housing affordability and mortgage rates as an impediment to retirement security, only around one in ten financial professionals (9%) think so. 

Financial professionals are more concerned about medical expenses in the long term; 82% say health care costs are a significant factor in their Millennial clients’ ability to plan for retirement. But this topic isn’t on the radar for Millennial investors—only 13% see costs of long-term care expenses as an obstacle to retirement planning. 

There’s a similar disconnect with government retirement programs like Social Security, Medicaid and Medicare. Just over one-third of financial professionals (35%) say the uncertain future of these programs poses the most immediate challenges to client portfolios. Yet, only 6% of Millennial investors consider the presumed lack of Social Security funds as a challenge to their retirement preparations.

Removing blind spots with a broader view

As a financial professional working with Millennial clients, where should you go from here? You can start by putting the more immediate needs of your Millennial clients such as home ownership in context with their broader financial plan. There shouldn’t be a choice between home ownership and retirement security. Both goals are compatible, but they should be considered together in order to make them more achievable.

Once you establish a more comprehensive view of their financial plan, you can introduce strategies that put your clients on a clear path to retirement security. For example, investing in workplace retirement plans and products that offer guaranteed lifetime income could help Millennial clients build wealth and lessen fears over running out of money during retirement. Millennial investors voiced openness toward solutions like annuities; over six in ten Millennial investors (61%) said they are likely to put part of their portfolio in an annuity or other solution that provides guaranteed retirement income given the events of the last 12 months.

When you’re looking for support to help you build a holistic financial plan for your clients, Nationwide has resources and solutions you can use. Insights from our survey can help you address the specific challenges your Millennial clients face and help them feel more confident about their financial future.