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- Two thirds of 126 million households have less than 100,000 dollars saved for retirement.

- What advice would you give Millennials or people just starting out in the workforce?

- Well, so a lot of people when they're saving for retirement and they get access for the first time they're given this employee benefit and then say, "You can save for retirement." And you say, "That's great." "What should I invest in?" Right? And typically what people do is because they're not so sophisticated about money, they'll use something. They call it one over N. If you have 10 funds in your 401k investment option menu, you'll invest in all 10. You'll put like 10 cents in one and 10 cents in another. Right, which is not really a great way to do it. So my advice is, especially if you're not yet sophisticated about investing, is to maybe use a target date fund. So that's a kind of a fund, it's an all in one fund. It might invest in 10 mutual funds and you don't have to worry about asset allocation. It does it for you and you don't have to worry about rebalancing. It does it for you. All you have to worry about is your anticipated year of retirement. So if you're in your 20s or 30s, it might be the 2060 or 2065 fund and that year is matched to your anticipated year of retirement. And when you're starting out that's as good as any fund to invest in when you're just starting out and you might not have any other assets. When you get older, you wanna be, you know, more sophisticated about it, right? You might have other assets in a taxable account. You might have money in a traditional 401k and then you'll wanna start asset allocating based on all of your investible assets because, you know, at that point you might, you wanna avoid duplicating your investments.

- More sophisticated.

- A little bit yeah.

- For now we can be more aggressive?

- Well, so here's the thing about aggressive versus not aggressive, right. When you're younger people typically say you can invest more aggressively because you have 30 years to go through you know, four or five market cycles. And that, on average historically, large cap stocks return 12%, and, or small cap stocks 12% and large cap have been 10% and bonds have been five and so that you have the benefit of time, right, that you could invest in more aggressively when you're younger. And as you get closer to retirement you wanna invest more conservatively and be more safely invested in less risky assets. Maybe more bonds than stocks.

- You know, I gotta ask you. A lot of my friends, they have 401ks and then they constantly tell me like, they don't wanna be investing in the market and it's kinda frustrating 'cause I don't know how to explain to them when you have a 401k, you are investing in the market. Can you explain that a little bit more?

- Well, so, yeah. I mean. The hard part is, you know, I think what happens is people don't want to lose money. Right?

- Yeah.

- More often than not I hear someone say to me. Or you think back to like the Lost Generation that we just had a little bit ago. A lot of people were investing in 401ks for 10 years and at the end of the 10 years they actually had less money in their 401k than they had put in. Right, and that discouraged people from wanting to invest, right, because it's risky. Right? So I think what you have to tell people is it is risky, but the alternative is to invest in things that are less risky and that doesn't necessarily bode well, because you're exposing yourself to other risks, right? In the market you're exposed to market risk and that's volatility and that means you could lose money. If you invest in things that are safe you're gonna be subject to inflation risk. Right? And so what you're going to do is have your money earn less than what inflation is, which means that you're actually losing money, right, by investing in safe things. So you want to strike a balance, right. There are all these risks that you have to manage when you're investing and you have to sort of say, "I understand the risk." And the risk here is over 60 years markets will go up 50%, down 50%, up 30, down 20, whatever it is, but on average it'll be 12 or 10% if I'm fully invested in the stock market. So you have to be able to say, "I can withstand that kind of volatility." Now people also, I'll say this too, I'm not a big fan of risk tolerance questionnaires. People always say, "I'm gonna fill out this questionnaire" "and it's gonna label me as aggressive, moderate," "conservative, safe investor." Right? Well the point of the matter is it doesn't really matter whether you're an aggressive investor or a moderate or a conservative, right. Because if you have 40 years of investing to go through, well, you know, you've got time to an aggressive investor. But you have less time to be aggressive when you're in your 60s. So worry less about your tolerance for risk and more about education, educating yourself about the kind of risk that you face when you invest in the market.

- One thing that's new in Millennials are these apps like Robinhood or Acorn or different things like that. What do you see that doing for Millennials that are trying to save or even towards retirement or just saving in general?

- Well, I, so on the one hand I think it's great. Things like Robinhood are introducing. I have a son, he's 22 years old and he introduced me to Robinhood because he would get a free stock or something. I forget what.

- There's a couple free trades like that.

- Yeah, free trades. Whatever it might be. And so, instead of me having to teach him as much as I tried to teach him about investing, Robinhood disenfranchised me, right. Disintermediated me from having to teach him about investing. So, you know, to Robinhood's credit, to YouTube's credit there's things that are happening that are teaching people about investing and I think that's good. There was a very great book written many years ago in the 1920s about the difference between speculating and investing. And, you know, for many people, what they're doing is speculating, right? They're not investing, right. They're not taking the time to think about price earnings ratios and not taking the time to think about macroeconomics. They're just saying, "Oh my friend, you know," "they said Home Depot was down" "and now it's a good buy." Or, "Navidea is down and now it's a good buy."

- Day trading versus investing.

- Right! And they're just sort of like, you know, they're going to a casino. But, you know, the market is not a casino, right? It's really a place where you, I mean you can make lots of money, certainly. But you can also lose lots of money as your friends have.

- Yeah, yeah.

- And so the better thing to do would be to become, you know, smart, right. I write about retirement folks who are largely on the precipice of retirement and I called my readers, students, because they really care deeply about getting it right. And I think young people should feel the same way about investing. Care deeply about getting it right and less about maybe making money.

A Charles Schwab study, released earlier this year, showed that the younger generations expect to retire at 60 years old, which is seven years before Social Security kicks in for their age bracket. But, is that a reality? 

Retirement Daily's Robert Powell sits down with some of the youngest reporters at TheStreet and Real Money to answer that question and many more in TheStreet's new video series "Ask Bob".

Retirement Basics: What's a Roth IRA?

Mr. Retirement himself broke down what the younger workforce needs to know.

In general, experts say adults entering the workforce use a Roth IRA for retirement, but over time they should consider using all three types of accounts.

The Roth IRA is like a traditional IRA in one respect: The money in your Roth IRA (including earnings and gains) grows tax-free. But the Roth IRA differs from a traditional IRA in two ways:

With a Roth IRA, you contribute after-tax dollars into the account; Roth IRA contributions aren't deductible. By contrast, you may be able to claim a deduction on your individual federal income tax return for the amount you contributed to your traditional IRA.

Breaking Down 401k's

Those who are new to the workplace may not even know about their company's 401k plan.

Some of the younger generations don't even realize that the 401k is technically an investment.

"A 401(k) plan, named after the IRS tax code section that details 401(k)'s, is an employer-sponsored retirement plan that enables career professionals to save money for their post-working years in a tax-deferred manner. Once a worker retires, any withdrawals from a 401(k) plan are taxed by the IRS," wrote TheStreet contributor Brian O'Connell. "Any contributions to a 401(k) plan can be deducted from the plan participant's taxable income; assets accumulate in a tax-deferred manner. The idea behind 401(k) plans is to defer taxes until retirement, at which point, the plan participant is in a lower tax bracket. 401(k) plans are by far the most widely used employer-based retirement plan."

"401(k) plans can--and do--offer stocks, stock funds, bond funds, money market funds, exchange-traded funds and annuities," wrote O'Connell.

Investing Through Apps

Don't want to lose money in the stock market but want to start building up a portfolio?

Apps such as Robin Hood, Stash and Acorns are becoming more and more popular for the younger generations who want to start small.

It's never too late -- or too early -- to plan and invest for the retirement you deserve. Get more information and a free trial subscription to TheStreet's Retirement Daily to learn more about saving for and living in retirement. Got questions about money, retirement and/or investments? Email Robert.Powell@TheStreet.com.