Gen Z and Millennials Expect To Retire Before Age 60 – But Is This Realistic?

A young man running on the bridge along a river.
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The COVID-19 pandemic has shifted many things about the way we work, what we value in our jobs and even when we plan to retire. A recent Northwestern Mutual study found that 11% of Americans believe they will retire earlier than planned — including the youngest generation of workers. Gen Z now plans to retire at 59.4 while millennials plan to retire at 59.5 — years shy of the “traditional” retirement age of 65.

See: 4 Best Starter Credit Cards for Gen Z
Find: Should I Save More for Retirement or Put Money Toward a Down Payment?

But is retiring before age 60 actually achievable for these generations?

Gen Z and Millennials May Not Be Planning for a ‘Traditional’ Retirement

While older generations typically view retirement as leaving the workforce completely, this isn’t necessarily the case for Gen Z and millennials.

Read: Why Investing Is the Wave of the Future for Gen Z

“I think the way that Gen Z is thinking about retirement is fundamentally different than previous generations,” said Christian Mitchell, executive vice president and chief customer officer at Northwestern Mutual. “I can see younger generations retiring from their core career, but then having a second, third, fourth or fifth career in retirement. They may be working part-time and earning some money, pursuing a passion or supporting a social cause. I think when Gen Z is saying they intend to retire early, you actually have to dig behind that. I think the true story is that they’re planning to retire very differently than previous generations.”

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Discover: These Are the 15 Best Cities for Gen Z to Live Well on a Budget

If these younger generations continue to generate income in “retirement,” they may be able to enter their version of retirement earlier than if they stopped working cold turkey.

Young Generations Have Time on Their Side

Members of Gen Z and millennials who are determined to retire by age 60 can make wise choices now that may make early retirement possible.

See: Surprising Ways Gen Z and Millennials Are Worlds Apart Financially

“The benefit that they have is that time is on their side,” Mitchell said. “If they make very savvy moves today, they can benefit from the time value of money and be in an excellent position to retire, almost regardless of what their financial situation is. If they begin saving, if they thoughtfully invest, if they work with a financial advisor, if they have a financial plan, all of those things could put them in a better place to retire than perhaps a previous generation.”

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However, Some Members of These Generations May Be Overly Confident About Their Ability To Retire Early

Although there are circumstances that can make retirement at 60 achievable for some, not everyone will be able to retire early — even if they currently feel confident that they will be able to do so.

Learn More: How Millennials Can Avoid a Financial Midlife Crisis

“I do wonder at times, for this young generation — particularly those who have gotten into bitcoin or NFTs and have seen very rapid gains — perhaps that gives them greater confidence, perhaps over-inflated confidence, in these assets — that they’re going to be able to help you retire,” Mitchell said.

Related: Surprising Ways Gen X and Millennials Are Worlds Apart Financially

Because these assets are so volatile, there’s no guarantee that they will make for a secure retirement 30 years down the line.

There Are Factors That Will Make It Difficult for These Generations To Retire Early

Overall, Mitchell believes that younger generations will actually have more difficulty retiring than previous generations, at least in the traditional sense.

See: 5 Brands That Are Getting It Right With Gen Z

“The primary force at play here is the increasing complexity of their financial lives,” he said. “If you think about previous generations, you may have had a pension, you retired, you were fine — maybe you bought a little life insurance along the way in case you died early. Things were pretty simple. Then you had the rise of the 401(k). People worked at the same company, or maybe a handful of companies, and accumulated significant assets. Again, you had a pretty standard retirement picture.”

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Their Impact on Money: Gen Z and The Future of Finances

“For the younger generations, they may have numerous careers, they may be taking a sabbatical from their career, they may be doing more gig work,” Mitchell continued. “They’re confronted with this ever-proliferating list of fintech companies that are selling fractional shares in sneakers, or you can tokenize your art collection. There are so many incredible innovations that are going to come out of all of these fintech companies that are being created, but if you take a step back, it also massively increases the complexity that these rising generations are going to face. If they can’t map that complexity, if there’s not a company or a financial planner or a financial plan that can help them sort through that complexity, it increases the possibility they make suboptimal decisions that eventually endanger their retirement.”

Gen Z and Millennials Who Want To Retire Early Need To Make Smart Money Moves Now

Although the odds may be stacked against them in some ways, Gen Z and millennials can retire by 60 with the proper planning.

Need To Know: 17 Steps Millennials Can Take Now for a Brighter Financial Future

“I believe strongly that those younger consumers should start working with financial planners now,” Mitchell said. “In order to really fully benefit from that time value of money dynamic that’s on their side, they need to make the right decisions today so that their funds and assets can appropriately compound through time. Working with a financial planner, having a plan now, making those foundational decisions today, that’s absolutely critical. Having that expert guidance right out of the gate when time is on your side, it’s critical for effective retirement.”

As Mitchell notes, there is no one-size-fits-all retirement, so working with a professional can help these generations come up with a retirement savings plan that best meets their individual goals.

Find: Money Advice You Shouldn’t Pass on to Your Gen Z Kids

“The financial plan that you pursue needs to be personalized to individual circumstances,” he said. “How much money are they making now? What lifestyle do they want in retirement? How much legacy do they want to leave? Which social causes might they want to support along the way? You have to answer those fundamental questions, and then you can back into how much money to save, how much money to invest, etc.”

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About the Author

Gabrielle joined GOBankingRates in 2017 and brings with her a decade of experience in the journalism industry. Before joining the team, she was a staff writer-reporter for People Magazine and Her work has also appeared on E! Online, Us Weekly, Patch, Sweety High and Discover Los Angeles, and she has been featured on “Good Morning America” as a celebrity news expert. 
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