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Millennials hope to retire at age 50. That’s a big question.


That said, millennials have suffered a series of financial setbacks, from the dot-com bust to COVID.

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The average millennial is in our 30s, an age when most of us are well versed in the ups and downs of financial life.

It may come as a surprise, then, that the average millennial expects to retire before age 60, a goal not many of us can afford to achieve.

In a February poll, YouGov asked millennials when they expect to retire. The largest share, 30%, chose the age category of 51 to 60 years. Another recent survey from Principal Financial found that the average millennial expects to retire at age 59.

Other retirement surveys show that millennials plan to work well into their 60s. Still, together the reports suggest a clear pattern.

Millennials expect to retire younger. Older Americans, from Generation X and the Baby Boom, expect to retire older. Few workers of any age have the money needed to retire early.

“There’s a huge difference between wanting to retire at 55 and actually retiring at 55,” says Sam Nofzinger, managing director of brokerage at Public, an investment platform based in New York.

A paradox that is central to American working life

Retirement surveys reveal a paradox at the heart of millennial Americans’ working lives: They hope to retire early. They expect their retirement to cost $1 million or more. Yet they have only saved a small part of that amount.

A recent report from Northwestern Mutual found that millennials believe they will need $1.65 million to retire comfortably. However, so far, millennials have only accumulated $62,600 in retirement savings. That leaves a “pension gap” of more than $1.5 million.

Financing a comfortable retirement in America means using a combination of Social Security, savings and other sources to replace lost wages in the final years of life.

The sooner you retire, the more money you need. Social Security doesn’t kick in until age 62, and Medicare generally doesn’t cover health care costs until age 65.

“Most people, the vast majority, would not be prepared to retire before age 60,” says Henry Yoshida, CEO of Rocket Dollar, a retirement platform based in Austin, Texas.

Millennials, born between 1981 and 1996, are the largest generation in the U.S. workforce and will make up nearly two-fifths of the workforce in 2020, according to a report from Johns Hopkins University.

Millennials face a retirement dilemma

The 2023 Transamerica Retirement Survey of Workers, published by the nonprofit Transamerica Center for Retirement Studies, underscores the generational dilemma.

The largest share of millennials, 32%, expect to retire before age 65, the survey shows. But only a third of millennials have a written retirement plan. Most millennials have retirement savings, but the typical millennial has only $49,000 saved.

One advantage: Millennials appear to be retiring earlier than older generations. According to the Transamerica survey, the average millennial started saving for retirement at age 25. In contrast, the typical Gen-Xer waited until age 30 to start saving for retirement. Boomers put it off until age 35.

“From everything I’ve seen, they’ve actually had better habits,” Yoshida said. “They have proven to be much more interested and better informed than Generation X or the boomers” in preparing for retirement. “I don’t think they get enough credit for that.”

Millennials have endured their share of economic downturns.

Millennials ‘just can’t catch a break’

Many millennials were in school when the dot-com bubble burst in 2000, entered the workforce during the Great Recession of the late 2000s and were entering their peak years when COVID hit and largely shut down the economy.

“As a millennial you just can’t take a break,” says Nofzinger, who belongs to that generation. “You had 9/11, then you had the collapse, then you had COVID. Every ten years you had a hundred-year flood.”

Those crises have shaped millennials, financial experts say, giving them a stronger sense of living in the moment and a less materialistic outlook than the generations that preceded them.

“I think the millennial generation in general is more into carpe diem,” says Jaime Eckels, a certified financial planner at Plante Moran Financial Advisors in Auburn Hills, Michigan. “They don’t want to sit at a desk and work until they are 65. They want to travel and gain life experience.”

Michelle Winterfield, a millennial from Detroit, is the co-founder of Tandem, an app that helps couples manage their finances.

Winterfield knows millennials are struggling to save for retirement, and she doesn’t believe it’s entirely their fault.

“I think the cost of living has become crazy, especially for people living in cities,” she said.

As home prices and mortgage rates have soared, many millennials don’t have the money to buy a first home, a rite of passage for older generations.

‘You start much further behind’

“You start much further back,” Winterfield said.

A 2022 study from the nonprofit Urban Institute concluded that early millennials, born in the 1980s, are more likely than older Americans to be short on retirement funds.

The study predicted that 38% of older millennials will face inadequate income by age 70, compared to 35% of early Gen-Xers, 30% of late boomers and 28% of early boomers . The report cited, among other things, the growing wage inequality between rich and poor Americans.

And what exactly does it take for a millennial to retire comfortably at age 55?

Everyone’s situation is different. But financial planners often say that a worker should spend at least 25 years building retirement savings, setting aside at least 10% of their income.

“If people save 12% to 15% of gross income over a period of 25 years or more, they can retire at the end of that period with the caveat of having low personal expenses,” says Rocket Dollar’s Yoshida . “No mortgage. No consumer debt.”

Where is the will? More Americans wrote wills during COVID. Now they choose it.

A millennial born in 1995 could start saving aggressively now and have a good chance of retiring comfortably at 60, says Jean Smart, CEO of Penelope, a 401(k) platform for small businesses based in New York.

But the case can be hopeless for a 40-something millennial who hasn’t saved much for retirement, especially one burdened with credit card or student loan debt.

“Even within the generation,” Smart said, “there is such a thing as a tale of two cities.”