But it’s not all good news. The increase in savings could be due to the fact that millennials do not expect to receive employer-sponsored pension plans when they retire. In 1981, 84% of full-time workers in large companies participated in a pension plan; in 2020, that percentage has dropped to just 28%, according to the Bureau of Labor Statistics.
“A lot of baby boomers felt like their retirement was taken care of for them,” said Angela Montez, special adviser at law firm Eversheds Sutherland, where she focuses on retirement and investment policy.
Lifestyle goals also play a role in increasing savings, Montez said. Millennials are more mobile than previous generations, so investing in a home isn’t necessarily a priority, and their money tends to go into 401(k) plans.
About three-quarters of baby boomers and Gen Xers expect to own a home in retirement, while less than half of millennials do. More than 60% of Millennials will prioritize travel in retirement, according to the Schwab study.
Millennials also said they would spend less time managing their finances and investments once they retire, the study found, because they aren’t as focused on pursuing wealth accumulation anymore. later in life than Gen Xers and baby boomers.
“Millennials view retirement less as a target number and savings date and more as a target mindset or lifestyle,” said Jonathan Craig, head of investor services and marketing at Charles Schwab. .
There is one thing Millennials are focused on: cryptocurrency. Schwab found that around 25% of Millennials plan to invest in digital currencies, compared to around 5% of Boomers.
Advisors remain skeptical of such changes.
“Success in retirement comes from tried and true things like diversification, participating in the growth of the US and global economy through traditional equities – things that have cash flow and generate growth” said Rob Williams, managing director of financial planning, retirement income and wealth management at Schwab. “Crypto is not currently considered to have that.”