Tuesday, September 27, 2022
The new “American Dream” for many millennials is walking away from their careers and into retirement at age 50, much earlier than their parents. This is indicative of a generational shift, where millennials prioritize careers that are in alignment with their personal interests over higher financial gain.
Many attribute this desire to watching older generations put their lives on hold to save, only to retire and become ill or have their spouse die.
Financial consultants warn that this goal is not achievable for many, given living costs and lifestyle costs. The 2022 Retirement Insights Survey from TIAA revealed that 31 percent of people ages 30 to 39 indicate that they have an above average confidence level in their retirement planning. This percentage jumps to 40 percent for younger millennials. Yes, many are not saving enough or contributing enough to their 401(k), leaving the employer match on the table.
Additional challenges facing younger generations are fewer employers offering pension plans, and 401(k) matching is not guaranteed. The lack of pension and 401(k) match puts the burden on employees to save for their future. This shows a shift from employers helping their employees prepare for retirement to employees helping themselves.
Experts advise that having a mix of traditional retirement accounts and more versatile savings accounts in addition to diverse revenue streams as ways to combat these challenges.
For more information see “Millinnials Want to Retire at 50. How to Afford It Is Another Matter” New York Times, September 24, 2022.
Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.