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The short version

  • Millennials save younger and save more than their baby boomer parents.
  • With more debt and higher mortgages, millennials often save more due to high financial anxiety.
  • Most millennials believe they’ll continue to work into retirement.

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Millennials save earlier than boomers, according to study

A recent study by Charles Schwab shows that millennials have started saving earlier than their parents’ and grandparents’ generations.

Millennials clearly have a different, more pessimistic, outlook on their golden years. And it’s easy to see why: it’s no secret that there’s a chance Social Security could run out long before millennials reach retirement.

In order to deal with the anxiety of quickly depleting social programs and constantly rising inflation, millennials have been putting away money in their early 20s, while baby boomers more commonly started in their 30s.

Why are Millennials saving sooner?

Unfortunately, millennials aren’t saving sooner just because financial literacy has improved. Millennials simply understand the realities they’ll face when they reach retirement age. Here are a few of the reasons that young people are taking retirement savings so seriously.

More anxiety around retirement

With about 72% of millennials reporting that they’re pessimistic about their finances for retirement, saving sooner is, in many ways, a result of financial anxiety.

Millennials are used to feeling this financial anxiety. Many graduated with large amounts of debt. And they've also lived through multiple recessions.

This has created a sense of fear in many young investors who know they’ll likely need to save significantly more than their parents if they’re to live a comfortable life during retirement.

Fewer pensions

My grandfather has lived on his pension for over 20 years. As a long-time employee of the IRS, he worked for years to earn that pension.

I, however, like most millennials, have no intention of ever receiving a pension in my retirement years. Perhaps that’s because the average millennial only remains in the same job for just under three years. And pensions are reserved for those who work large portions of their working lives for the same company.

Millennials have become an integral part of the gig economy. And that’s not likely to change anytime soon. Due to this, millennials recognize they’ll likely be solely responsible for funding their retirement.

Less home security

Many people currently entering retirement are finally living without a mortgage. Millennials are having a harder time imagining this reality for themselves because they can’t even achieve homeownership now.

Millennials significantly lag behind their older counterparts when it comes to homeownership. So they may not have the same luxury of living mortgage-free for years when they’re older.

According to the Schwab study, three-quarters of baby boomers and Gen Xers expect to enjoy stability through homeownership during their retirement years. Millennials, however, plan to prioritize other opportunities such as travel.

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How are Millennials saving compared to older generations?

The investing world has changed substantially with the rise of new technologies. With so many options and a longer time frame for investing, millennials are venturing into more unknown waters with their money.


Cryptocurrency is a complicated investment option, to say the least. But it’s an option that is dominated by the younger crowd. In fact, 31% of those ages 18 – 29 have used crypto, with young men specifically being the largest group that invests. Gen Xers are slightly interested in crypto (19%), but baby boomers are even less likely to invest in digital currency (5%).

With Bitcoin millionaires appearing overnight, crypto can seem like an appealing investment option for younger investors. Plus, since it appears that crypto isn’t going away any time soon, millennials are hoping their investments pay off down the road. Of course, we recommend checking with your financial advisor, or at least doing some research before considering crypto as an option.

SRI & ESG investments

Younger investors want their investments to align with their moral values. That’s why SRI (socially responsible investing) and ESG (environmental, social, and governance investing) are on the rise.

Between 2018 and 2022, SRI investments grew by 42%, indicating a strong shift in the investing world towards companies that are looking to better society.

According to Morgan Stanley, 67% of millennials take part in sustainable investing. But a study by Personal Capital found that only 49% of baby boomers are interested in SRI.

Robo advisors

Millennials take advantage of online investing platforms far more often than older generations. Robo advisors make investing more accessible, and with larger, well-respected companies jumping on board, it’s a trend that’s here to stay. However, older generations who grew up with less technology aren’t as comfortable making the switch just yet.

Will Millennials retire sooner than boomers & Gen Xers?

While millennials are saving for retirement sooner, they may still have a hard time saving as much as much as generations did in the past. Student loans, higher mortgages and rents, and lower income opportunities are major contributing factors to this inability to save as much as they’d like.

If this pattern continues, millennials may end up retiring later than their older counterparts. In fact, a Harris Poll, done on behalf of CNBC, found that about 61% of millennials fully expect to work multiple or at least a part-time job during their retirement years.

How about wealthier?

Millennials are trying their best to prepare their finances for retirement. And while they can’t entirely rely on pensions, they're on their way to potentially saving more than their parents. Millennials do, according to a Pew report, have more in their retirement accounts than their parents did when they were younger.

The slightly younger generation (Gen Z) seems to be the generation with the most potential to live a wealthy lifestyle during their retirement. They are disproportionately investing younger, with about 28% of Gen Zers holding stocks in 2019..

The bottom line

Millennials are saving earlier than other generations, but that doesn’t necessarily mean they’ll be set for retirement. With other financial issues in the way, they may still struggle to retire earlier or wealthier than generations before them.

The good news is that millennials, as a whole, are proactive investors. And they're taking a creative approach to their investments by prioritizing new opportunities like crypto and funds that align with their values.

Further reading:


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About the Author

Chris Murray

Chris Murray

Freelance Contributor

Chris Murray was formerly a freelance contributor with Moneywise.

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