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Study: Retirement saving, goals shifting from generation to generation

Written on May 19, 2022

Millennials have an evolving vision of retirement, different from previous generations, according to Schwab’s new Retirement Reimagined Study that uses advanced predictive modeling techniques to forecast key differences in how Millennials, Gen X and Boomers will approach saving for and living in retirement.  

The first of its kind study also projects four distinct retirement personas that Millennials could fall into as many of them transition to retirement around 2050. 

Among the key findings, Retirement Reimagined reveals that while Millennials have the jump on Boomers when it comes to saving for retirement by starting to save nearly a full decade earlier in their mid-20s, they are likely to spend less time managing their personal finances and investments once in retirement, as compared to Boomers or Gen X. Another significant generational shift predicted by the Schwab study is that Millennials will be more likely to use their savings to achieve their dream lifestyle and pursue their passions along the way and once in retirement, while Boomers and Gen X will aim to continue accumulating wealth during their retirement years. 

One of the key differences in how Millennials expect to live in retirement compared to previous generations is rooted in the value they place on having more flexibility and new experiences in retirement, compared to Boomers who value stability and consistency, according to the study. 

Three-quarters of Boomers and Gen Xers alike are expected to enjoy stability through home ownership in retirement. Millennials, on the other hand, will prioritize travel (61%), with less than half (48%) predicted to own a home in retirement. 

Boomers also maintain a more traditional approach when it comes to finances. Focusing on financial security and traditional investments, nearly half of Boomers (48%) invest in stocks, while only a fraction (five percent) put money into digital currencies. In contrast, a quarter of Millennials (24%) along with nearly a fifth of Gen X (19%) plan to invest in digital currencies in retirement. 

Schwab’s study predicts that Millennials will likely fall into four distinct retirement personas by 2050 when a large portion of them are shifting to retirement: 

  • Practical Achievers: Will prioritize financial security more than their peers. They will continue placing importance on digital investments and currencies, extensively researching their assets, staying abreast of macro-economic trends and investing evenly in stocks and cryptocurrencies. 

  • On-Trend Friends: Driven by purchasing power and a close pulse on all things culturally relevant, On-Trend Friends will prioritize keeping up with the latest consumer trends and spend more time and money on shopping than their peers. Like Practical Achievers, On-Trend Friends value financial security more than the other two personas, as a way to maintain a healthy spending and entertainment budget. 

  • Relaxed Minimalists: Equally satisfied by the company of their close-knit inner circle and the simple pleasures of their day-to-day routines, Relaxed Minimalists will value deep relationships more than other personas. They will place less focus on finances and devote more time to hobbies, relaxation and me-time. 

  • High-Tech Jetsetters: Nomadic and fast-paced in nature, High-Tech Jetsetters will prioritize travel and be more open to long-term travel than their peers, trusting technology to keep up with friends and family as they move about retirement. Their curious nature, tenacity and commitment to the latest gadgets will carry through into retirement.