Millennials Plan To Spend More in Retirement Than Boomers — How Much?
Written by
Jami Farkas
Edited by
Chris Cluff
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A survey by GOBankingRates asked 1,395 Americans ages 18 and older their thoughts about 12 retirement-related questions, including just how much they plan to spend each month when they retire, outside of housing costs.
The responses showed millennials hope to save a lot for retirement — and spend a lot each month, far outpacing the baby boomer generation of their parents or grandparents.
Also see key signs that millennials will have enough saved for retirement.
More Millennials Aim To Save Big
The survey results showed that 45% of respondents ages 25 to 34 aspire to save between $500,001 and $1.5 million for their retirement, and 40% of those ages 35 to 44 hope to put away that amount. The Library of Congress generally defines the millennial generation as those born between 1981 and 1996, putting their current ages at 28 to 43 and straddling both groups of respondents.
Baby boomers — born between the end of World War II and 1964 — have much different spending ideas.
In the groups that cover the baby boomer generation, 26% of respondents ages 55 to 64 said they wanted to save between $500,001 and $1.5 million, with the 65-plus group coming in at 20%.
But how does that money socked away for retirement translate to monthly spending?
Among the younger millennial group (ages 25 to 34), 6.88% of respondents said they expect to spend between $2,501 and $3,000 each month, not including rent or a mortgage payment, in retirement. Among the older millennials (ages 35 to 44), 5.85% favored that amount. That’s more than either of the two groups that include baby boomers — 55 to 64 (5.48%) and 65 and older (4.32%).
The retirement spending in the survey was divided into increments. Above the $2,500 threshold, when you combine the two groups that encompass millennials and the two that include boomers, the younger Americans plan to have a larger monthly budget in retirement at all spending levels but one.
At the $7,501 to $10,000 level monthly, the boomers exceed the millennials by just a small amount.
When all age levels are factored into the survey, the majority of respondents — 23% — said they expect to spend just $501 to $1,000 in non-housing costs each month.
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