Are Millennials the Last Generation to Retire Comfortably?

For decades, the expectation of a golden retirement was a sure thing — work hard, save up and enjoy your golden years. But for Millennials, that dream is growing further away. With costs skyrocketing, student loan debt crippling millennials, and economic uncertainty abound, the retirement landscape has dramatically changed — and we are left to wonder: Are millennials going to be the last generation to retire comfortably?



In contrast to Boomers, who had mostly linear career paths with pension plans, Millennials came into adulthood during the fallout from the 2008 financial crisis. Many earned modest wages, faced high housing costs and, of course, crushing student loans.
The average Millennial household is sitting on tens of thousands in student debt, and those who have that debt will have to (hopefully!) spend decades investing early for retirement. And with wages lagging behind inflation, saving for tomorrow has become secondary to just making it through today.
Contrast that to Boomers, many of whom enjoyed inexpensive education, generous pension plans and decades of uninterrupted economic growth. Millennials, instead, are making their way through an economic landscape that seems rigged against them.



Ask the typical American how much they think they need in order to comfortably retire and the answer is jarring: between $1.2 million and $1.8 million.
But here’s the dose of reality: Those between 35-44 (the sweet spot of the Millennial generation) have a median retirement savings of roughly $142,000 — a fraction of what you’ll [really] need. Even older generations, nigh retiring, are failing to reach that million-dollar milestone.
The space between what is expected and what is coming true is growing. And with the uncertain future of Social Security, Millennials might not have that safety net when they finally enter retirement age.



Social Security has been a tent pole of retirement for decades. But as the population ages and fewer workers support retirees, experts say Social Security might only be able to pay a portion of benefits by the 2030s if major reforms don’t occurs.
For all Baby Boomers, that means Social Security won’t be enough. Instead, they’ll need to save and invest more proactively to avoid financial hardship later in life.



Still, retirement isn’t unachievable — it just takes a more calculated approach. Here are steps Millennials can take to set themselves up for financial future success:

Even if you can’t set aside large amounts of money, it’s always better to save something than nothing. Over time, compound interest can help even small contributions to a 401(k) or an IRA add up.
If your employer provides a 401(k) match, accept it! This is basically free money that can match your contributions and get your savings interest doubled.

A savings account isn’t going to do it. Instead, Millennials are better suited to setting money aside for the long run with diversified investments, such as index funds, stocks, and even real estate.

High-interest debt, particularly credit cards, can erode savings. You can take significant amounts off your debt (such as student loans and credit cards) which means you’ll be paying less in the future and leave you with plenty of cash to invest.

Though not the sexiest choice, pushing retirement back just a few years can dramatically ramp up Social Security benefits and give savings more time to grow.

And if it’s tough for Millennials, Gen Z and their successors might face even greater difficulties. Skyrocketing costs of education, possible cuts to Social Security and ever-rising living expenses all mean the next generation needs to begin saving even sooner.
The takeaway? Understanding financial concepts and plans is more important than ever. While retirement as we know it is becoming a thing of the past, with savvy planning, Millennials (and generations to come) can still retire wealthy and comfortable.



So, are millennials the last generation who will know a comfortable retirement? Not necessarily — but they are the generation that will undergo the sharpest transition in what retirement means. Unlike Boomers, they won’t have company-wide pensions or a guaranteed Social Security safety net. Retirement, for Millennials, will be, instead, a more active, strategic process of savings and investment.
But it’s not entirely doom and gloom. Millennials have proven themselves to be very resourceful, innovative, and willing to call out outdated systems. If they bring that same attitude to their finances, they might just reinvent what “comfortable retirement” means.
The key? Start planning now. Because in a world of economic uncertainty, financial independence will mean what retirement was really all about.

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