They're tech-savvy, optimistic and better educated than previous generations, yet millennials - born between 1982 and 2 000, or those aged between 18 and 36 - are facing an impoverished retirement.

"It's going to be catastrophic," says Khaya Gobodo, the managing director of asset management at Old Mutual Investment Group, reflecting on the latest research by Old Mutual into the financial behaviour of employed SA millennials.

"They prefer not to be formally employed and start saving for retirement late in their working lives; they don't have structured savings; they don't preserve their savings; they switch investments, incurring transaction costs along the way; and they will live longer than any other generation."

These are the makings of a "perfect storm", Elize Botha, the managing director of Old Mutual Unit Trusts, says.

Sanlam has also identified millennials as the generation most at risk of having insufficient savings at retirement. Its research shows that millennials don't relate to retirement as a goal, don't trust the financial services industry - this is highlighted in Old Mutual's research, too - and are over-confident about their own ability to manage their finances.

According to Old Mutual's research, SA millennials are mostly female (only 36% are male), black (29% are white, 16% are coloured, and 10% are Indian), and one in three have a bachelor's degree. They constitute 43% of the working population - or 7.1-million out of the 16.3-million employed people in the country.

Only 24% of working millennials interviewed by Old Mutual have invested in unit trusts as an investment separate from a retirement annuity or a pension fund.

Of those who do not invest in a unit trust, 47% said they didn't know what it was, while 30% said they didn't feel they had enough money to invest in one. You can invest in a unit trust for as little as R100 a month and have the flexibility to stop and restart saving at any time without incurring penalties.

Only 15% of millennials have what they term an "investment" policy. And their preferred place to save is in a bank account, which is not only costly and risky - given your ease of access - but unwise considering that money in the bank does not keep pace with inflation. The interest earned is generally lower than inflation, meaning the longer you leave your money in the bank, the less it is worth.

This alone shows that millennials are not financially savvy - or not as savvy as they think they are - and could benefit from financial advice.

The top 10 financial products used by millennials are: bank savings account, cheque accounts, medical scheme, pension fund, banked cash savings, funeral policies, death and disability policies, short-term insurance, tax-free savings accounts, and retirement annuities, indicating a lesser focus on wealth-generating products.

When asked what they are saving for, 44% of millennials say for a rainy day, 37% for a holiday, 35% to pay off debt, and 33% for children's education.

Another feature is that they tend to have a lot of debt - and not the good type, like a home loan. Of those servicing debt, 70% have personal loans, 42% are paying off a car, 27% are paying off credit card debt, and 21% are paying off an overdraft - debt that funds lifestyle rather than wealth-enhancing assets such as property.

"Despite being highly educated, millennials have low levels of financial education and literacy relating to budgeting, managing debt and the impact of compound interest," Viresh Maharaj, the chief executive of client solutions at Sanlam Employee Benefits, says.

No matter how educated you are, you can be tripped up if keeping up with the Khumalos or the Kardashians is causing you to live in debt.

Mapalo Makhu, a personal finance coach and founder of Woman & Finance, says that unless millennials address their high levels of debt, they'll struggle to reach the goal of financial freedom and independence, to which most aspire.

But Makhu says they face unique financial challenges that make them susceptible to debt. "Many are playing 'asset catch up', purchasing appliances and motors vehicles on credit while caring for financially dependent relatives other than their children. This creates a tension between the expectations of family and the dreams millennials have for their own financial future."

Maharaj says instead of dampening confidence or viewing them as lost causes, the financial services industry needs to build financial literacy. Milliennials should be open to this. "Millennials do not want to be told what they can and cannot do. They want insight that . gives them the ability to make better decisions."