Financial literacy has been a long-time issue in the past. Boomers and Gen X haven’t had this exposure to financial awareness like millennials now. And while retirement is at the core of Boomers and Gen X’s plans, millennials are doing the same but with a different perspective on retirement. Some may think that millennial retirement would look similar to the Boomers or Gen X. However, millennials want their retirement plans differently, and it doesn’t have anything to do about saving that much money for future use as a retirement cushion.
Millennials are putting a new light on a more fun retirement, with lots of travels and experiences instead of money in the bank. While millennials were criticized for always slacking at work, jumping ship, heavy accumulation of student debt, and the FOMO culture, many are seriously thinking about financial independence.
And this includes their plans of retirement. However, this plan would look drastically different from the traditional retirement plans. Those that involve buying a house and quitting your jobs for retirement are no longer in millennials’ books.
Study on millennial retirement: travel over savings
A Schwab study reports that more millennials prioritize travel over retirement homeownership. Millennials want to use their savings to gain experiences and pursue their desired lifestyle. Instead of dwelling on traditional retirement plans, they want to act on their passions, even if it means not having a clear path to financial stability.
Millennials are banking on flexibility on non-traditional future goals as well. Unlike the millennials’ predecessors that were hellbent on having a particular retirement savings amount in mind, millennials want to refer to savings as a continuous accumulation.
They give little interest in preserving the desired retirement wealth and are not too focused on investment management like the Boomers.
Although these financial-related preferences may seem like they don’t hold promising plans for a millennial retirement future, it’s the action to avoid completely being slaves to the hustle culture that matters for millennials.
But this doesn’t mean millennials wouldn’t have enough in their bank accounts. They have started to save earlier than their predecessors, especially during the pandemic. Due to several job losses and uncertainty from external events, many millennials have begun to focus on financial planning.
Tips for Millennials to Pursue THE Desired Lifestyle While Saving Money
Who says you can’t have fun while saving money along the way? Here are some tips on how to effectively plan financially and retire happily:
- Save for the rainy days. Pursuing the desired lifestyle is the goal. However, millennials must always have an emergency fund to fall back on. Save some cash worth a few months in case any medical or non-medical emergencies arise.
- Focus on financial comfort rather than retirement date. Some people put focus on the retirement date. But the more important thing is to focus on your financial state. Create a goal that lets you enjoy financial comfort before your desired age to retire.
- Diversify and protect. It’s essential to diversify your investments and savings. That way, you’re protecting those that are vulnerable to financial instability and growing those with the right opportunities.
- Don’t fall prey to fad investments. You get bombarded with fad investments like stocks or cryptos nowadays. But don’t dwell too much on those, as these might steer you in the wrong direction that will hinder your financial freedom.
- Adapt to the changing times. Planning for savings and retirement isn’t a linear process. Revisit your goals and adapt to the changing times by making modifications that suit the circumstance.
