Millennials aren't saving enough for retirement. Here's how they can fix that

Jamie Grill | Getty Images

There's no doubt that it's difficult for 20 and 30-somethings to put aside a chunk of money each month for their far away retirement days. Despite 70 percent of millennials feeling stress and anxiety when thinking about retirement savings and investments, 40 percent of them have no retirement strategy in place at all, a survey from Franklin Templeton Investment finds. This paradox highlights the importance of financial education for younger generations who are in the early stages of their careers and have the most to gain from thinking about retirement now.

What's getting in the way?

As a whole, young adults in America are faced with two major financial hurdles that prevent them from having a lot of extra wealth to invest for retirement: high housing costs and student-loan debt.

According to data from the Pew Research Center, for the first time in over a century, more Americans between the ages of 18 to 34 are living in their parents' home than with a spouse or partner. One of the reasons for this is because wages for young men have been declining since 1970. Furthermore, college graduates under the age of 35 with student loans are spending nearly one-fifth of their salaries on student loan payments, a Citizens Financial Group debt study revealed.

Along with these issues is the temptation for Americans across age groups to spend beyond their means on things they might not need, making retirement savings even less of a priority. While not every millennial is shopping on their smartphone daily, it's definitely another avenue where money is spent. Young people have many immediate financial needs that occupy their attention so they're often focused on the short term and not thinking about retirement. In spite of these challenges, millennials will still have to do their part to save for their retirements and they'll have one advantage over their predecessors – the help of technology to get the most mileage out of their money.

How technology can help

Whether someone can save $50 a month or $5,000 a month, financial experts agree that saving any amount for retirement is better than nothing and this is where personal financial management apps can come in handy. For example, if you are 25 years old and begin saving $50 per month until the age of retirement, it will produce $162,000 by the time most people retire at 65 years old, assuming an average monthly compounded return on investment of eight percent. This number has the potential to grow upwards of $489,000 if the return on investment increases to 12 percent and the potential to decrease to $58,000 if the return is a mere 4 percent.

On the average day, 39 percent of millennials interact more with their smartphone than anything or anyone else so it makes sense to use this tool to help them with their finances, a Bank of America study found. Nowadays most major banks have mobile apps so customers can check their statements and account balances but these do not often provide detailed analytics to help users plan their spending and allot funds to specific retirement accounts.

Millennials should look into personal financial management apps such as Digit and Acorns among others, that provide users with real time insight into their spending habits and make it easier to allocate money to their retirement savings with a few taps on their phones. Each service offers different benefits and rates so individuals need to do their research to choose the one that will suit their lifestyle and needs the best.

Millennials are an impatient bunch and the idea of getting on the phone with a financial advisor or waiting in line at a bank branch to speak to someone isn't appealing. An astounding 71 percent of millennials would rather go to the dentist than listen to what banks are saying, according to the Millennial Disruption Index. The good news is that it's no longer a requirement for this generation to meet with a financial advisor face-to-face to figure out how to invest their money strategically. One approach that young people might want to look into is a robo-advisor, automated wealth management tools that use algorithms to provide investment advice.

"An astounding 71 percent of millennials would rather go to the dentist than listen to what banks are saying."

Robo-advisors and millennials are generally a good match because there is a much lower minimum investment, or none at all, and the fees are lower than a traditional financial advisor. Betterment, for example, provides a simple approach to investing that's ideal for millennials. With over 100,000 customers and $2.5 billion in assets under management, Betterment's technology solutions are redefining wealth management in the US by crafting personalized portfolios for clients in exchange for a small fee. Customers are charged a small percentage based on how much money is in an account and as an added perk, they will also give you an incentive to invest more by reducing fees.

For millennials looking to invest in their future, it's important to think about what you want to accomplish in terms of specific goals. Student loans are one of those goals that millennials are looking to pay off and it's a big reason as to why they are unable to save for the future. Paying off student loans and avoiding a hefty interest rate feels more important than saving for retirement. So while juggling student debt can be tough to balance, investing in the future is well worth it.

Enter Schwab Intelligent Portfolios, an online tool that can help millennials to set a savings goal and monitor progress. Schwab Intelligent Portfolios recommends an investment portfolio based on your goals, timeframe and risk tolerance. With these tools, millennials can "set it and forget it" to a certain extent by setting target dates according to their anticipated retirement years and letting the algorithms do the work. Furthermore, as millennials get older and have more money to save, robo-advisors will have reached a large part of the market share and will have squeezed margins for the industry that saves sizable sums of money for consumers.

The takeaway for millennials is that while they are facing difficult financial situations, be it from student debt or living paycheck to paycheck, it's important that they recognize where their money is being spent and allocating anything they can to their retirement funds.

Commentary by Sergio Chalbaud, CEO and co-founder of Fintonic, a mobile-banking app. Follow him on Twitter @Fintonic.

Disclosure: Fintonic does not have business relationships with any of the companies mentioned in this article.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.