The Scariest Statistic About Millennials and Retirement (Hint: It's Not Student Loan Debt)

Millennials as a whole are worried about their finances. In fact, according to a Bank of America/USA Today report released earlier this year, 41% of millennials are "chronically stressed" about money. And it's hard to blame them. Many graduated into a recession, most are saddled with gargantuan debt, and a large number are stuck in low-wage jobs.

And it turns out that most millennials don't know much about investing either.

The BofA/USA Today report mentioned above asked millennials what they felt they had expertise in (you could pick more than one category). Thirty-four percent said "Social Media." Twenty-three percent said "Health and Wellness." Seventeen percent claimed "Personal Finance."

Five percent said "Investing."

Five percent. Oof.

Here's why that has to changeInvesting will be crucial to retirement for my generation. We don't get pensions like many of our parents and grandparents -- we get 401(k)s. Social Security will probably be around when we retire, but it will likely pay less in benefits than it does today. And even with today's benefits, Social Security is only designed to replace around 40% of the average worker's yearly salary. Most retirement experts say you need 70% to 85% of your pre-retirement income to retire comfortably. So even if benefits were to remain the same -- which I don't see as likely -- Social Security still wouldn't be enough.

The only thing that can make up the shortfall for us is investing.

Investing for the long haulMillennials are in their 20s and 30s, so we've got a good 40-50 years until retirement (and that's assuming we retire at 65 -- Nerdwallet published a 2013 report indicating that the average millennial will probably retire at 73). That time is our best asset. And we can use it best by investing for the long term in quality companies.

Of course, most would argue it's easier said than done. With thousands of publicly traded companies out there and a financial media that focuses on the inane instead of the educational, you'd be right to be skeptical that "beating the market" is easily done. Heck, mutual fund managers -- those experts who are paid to beat the market -- routinely underperform instead. If even the professionals can't do it, how does someone pick great companies for the long haul when even the geniuses can't sift through all the data?

And the simple answer is that you don't have to. There is an easier way.

A basket of companiesExchange-traded funds (ETF) are awesome for new investors because they give you automatic diversification. If there's a particular concept you find attractive (maybe it's healthcare, maybe it's dividends, maybe it's energy companies), it has several associated ETFs, each of which carries a basket of companies centered around that concept. They also usually charge very low administrative fees, so you won't be paying a lot of extra money for the privilege of losing to the market (like with an actively managed mutual fund).

And some of them are really, really broad. You can always just invest in the entire S&P 500 with the SPDR S&P 500 ETF (expense ratio: 0.11%). This gives you broad exposure across the major sectors in the stock market. And while you can't exactly beat the market with an ETF that tracks the market, at least you won't lose to it by much. It's designed to match the S&P 500, so the goal is for your investment in the ETF to perform as well as the S&P 500, minus the 0.11% annual fee.

Taking it to the next levelBut with just a little extra work, I think you can do better than that. I think one of the most attractive ETFs for new investors is the S&P 500 Dividend Aristocrats ETF .

To become a Dividend Aristocrat, a stock must have paid 25 years of annually increasing dividends to investors. That's no mean feat, and this ETF comprises 52 stocks. Companies that have been around for that long and have been that successful are often household names like Hormel Foods, Lowe's, and McDonald's. I'm a fan of this particular ETF for three reasons:

1. These companies have been through a lot. Think about it -- to increase its dividend, a company usually has to keep growing, selling more of its product each year. To do so for at least the last 25 years straight -- through the dotcom crash, the Great Recession, and everything in between -- is a good sign that a company has a strong model that can endure in good times and bad.

2. Lower volatility than the broader market. If you're new to investing, the one thing you don't need is to be taken on a price rollercoaster, making and losing hundreds and thousands of dollars each day. Particularly early on, it's not necessarily about having amazing investing ideas -- it's just about not losing your shirt (and your nerve) in the stock market. And the S&P 500 Dividend Aristocrats Index (which this ETF is based on) has been less volatile than the broader S&P 500 since its inception in 2005.

3. Market-beating returns (and a dividend). The Dividend Aristocrats Index has beaten the broader S&P 500 since 2005, leading the Dividend Aristocrats ETF to beat the S&P 500 since its creation in 2013.

The 2.7% annual dividend yield doesn't hurt either.

It really can be simpleJust to be clear, you shouldn't put all your eggs in one basket -- even if the basket has beaten the market with lower volatility and is filled with business models that have stood the test of time. But the S&P 500 Dividend Aristocrats ETF is a good place to start, particularly if you're one of the 95% of my generation that isn't an expert in investing.

We can get there. Together.

The article The Scariest Statistic About Millennials and Retirement (Hint: It's Not Student Loan Debt) originally appeared on Fool.com.

Michael Douglass has no position in any stocks mentioned. The Motley Fool recommends Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.