Faced with the escalating climate crisis, many millennials are rethinking how they plan for retirement, according to a study from the University of Arizona.
“Millennials are the first generation to approach retirement savings with climate change as a pressing reality,” the researchers noted.
Climate-based decisions
The study, based on interviews with 50 participants aged 26 to 41, explored how climate change influences their financial decisions. The researchers identified recurring themes around emotions, behaviors, and perceptions of the future, focusing on a concept they called “imagined futures.” This term describes how people envision what lies ahead, their emotional reactions to those scenarios, and the impact on their financial planning.
Participants expressed a mix of fear and hope. Some viewed worsening climate conditions as a reason to delay or avoid long-term investments, while others felt inspired by sustainability initiatives and government action to plan for a more optimistic future. This divergence shaped their approach to savings and investments.
Parenthood emerged as a key factor. Participants with children reported higher levels of climate anxiety but also a stronger drive to invest in solutions that could benefit future generations.
Despite the uncertainty, many millennials in the study shared creative strategies for securing their financial future. Some prioritized investments in sustainable funds or companies with strong environmental, social, and governance (ESG) practices. Others leaned toward supporting community projects or local government initiatives aimed at climate resilience.
Transparency demanded
A consistent theme was the demand for more transparency and guidance. Many participants called for employers, financial advisors, and policymakers to offer tools and options that align retirement planning with environmental goals. They emphasized the need for accessible ways to incorporate sustainability into financial decision-making.
“We expected some people to see climate change as a reason to save more, while others might focus on enjoying life now,” the researchers said. “But we were encouraged to find proactive approaches to coping with uncertainty.”
However, millennials still lag behind previous generations in retirement savings, and financial literacy remains a challenge.
The study acknowledged its limitations, including its small participant pool and focus on financially engaged millennials. The researchers suggested future studies could explore how different generations—like Gen Z or Gen X—navigate the intersection of climate stress and financial planning, as well as how cultural and economic factors shape these decisions.
As climate change continues to redefine long-term planning, millennials are adapting to an uncertain future with both caution and innovation.
