New research from Vanguard explores how Millennials are planning to redefine and challenge traditional retirement norms like retiring at the target age of 65.
In fact, nearly two-thirds of Millennials envision retiring early, with more than 6 in 10 Millennials (61%) planning to retire before age 65 and 22% planning to retire even earlier, before age 60. But “retire” might not be the right word for it. Many say they plan to stay busy by either pursuing a new career (39%) or starting a business (35%) after reaching their retirement age.
The study, “Generational views on financial advice, investing, and retirement,” examines Americans’ feelings about financial advice, investing, and retirement, as well as how perspectives have shifted in light of COVID-19 and the corresponding market volatility.
Three-quarters of Americans report having their normal lives disrupted by COVID-19. Nearly one in 10 (8%) have canceled or postponed contributing to a retirement account. Nearly eight in 10 (77%) are either less confident or unsure of the pandemic’s economic impact on their future retirement security.
Confidence is notably more eroded among young Boomers and Gen X compared with younger generations. Despite the current environment, nearly a third of both Gen Z (32%) and Millennials (31%) are optimistic, expressing even greater feelings of confidence about their future retirement prospects.
Amid the pandemic, Americans’ top financial concerns are the economy’s impact on retirement plans and other investments. Four in 10 (43%) identify the economy’s impact on retirement plans as one of their top-three financial concerns, including about one-third (32%) of Millennials. About one-third (32%) rank non-retirement investments as a top-three concern, including one-fourth (25%) of Gen Z and Millennials, one-third (32%) of Gen X, and nearly half (46%) of young Boomers.
Despite concerns sprouting from the pandemic, most Americans are fairly confident they are saving enough for retirement. Still, there is room for improvement. Two-thirds of Americans (66%) are at least somewhat confident they are putting away enough money to be financially secure in retirement.
Looking across generations, young Boomers (78%) and Millennials (67%) are the most confident, while Gen X (58%) trails. Although these numbers appear relatively strong, only one in five Americans (20%) consider themselves “very confident.”
The full Vanguard Digital Advisor study, Generational views on financial advice, investing, and retirement, can be viewed here.