For Marissa Hathaway, saving for retirement was never a big priority compared to all the other expenses she needed to juggle as a single mom. Between paying for child care, rent, groceries, and other bills, there was just never much left over.
"I make under $100,000 a year and because of my ginormous student loans, I have not been able to save for my retirement, which makes me feel terrible," Hathaway says.
Marissa Hathaway with her son, who will be starting kindergarten this fall. Source: Marissa Hathaway
But Hathaway, a therapist based in Dallas, says turning 37 this year made her stop and reassess her priorities, especially since her son is heading off to kindergarten in the fall and there will hopefully be some extra money in her budget>Older millennials will likely approach retirement differently
Steve Clayton, a 38-year-old in Rehoboth Beach, Delaware, plans to retire early, likely within the next 10 years. However, he wants to continue to work — just at a more leisurely pace in a second career or doing volunteer work. Currently, the executive for a large multi-specialty medical group makes a six-figure salary and has about $450,000 saved.
"We're making sacrifices now, but hopefully that'll pay off in being able to go in a different direction at a relatively young age," Clayton says. Clayton's husband, Brad, is 42 and plans to retire in the next four years, while Clayton wants to work a bit longer before pivoting.
Above all, Clayton wants his second career to have a meaningful impact in his community. "I want my work or my time to feel like it's contributing to the greater good. That's really what drives me," he says.
Steve Clayton, right, hopes to retire at a young age so he can pivot to a different line of work that gives back to his community.Source: Steve Clayton
In fact, many older millennials are fairly optimistic about their retirement plans, with 71% saying they believe they'll be able to live comfortably in retirement and 65% believe they'll be able to retire when they want.
Whether they are prepared or not, increased longevity and>Many millennials are actually>Others less certain about what the future holds
Not all older millennials, of course, are confident they'll have a comfortable retirement. Over a third of millennials believe they'll never be able to stop working and 35% say they do not anticipate having enough money to retire comfortably, according to a survey from the National Association of Financial Planners fielded earlier this year.
In many respects, this stems from the fact that millennials have lived through two major economic recessions in their early adult years, which put many behind in their careers and savings. Black, Hispanic and less-educated households of older millennials were also much more likely to experience significant financial insecurity as a result of the Covid-19 pandemic, according to research from the St. Louis Fed's Institute for Economic Equity.
"A lot of this generation want that financial flexibility, want the ability to step out of the workforce and come back, want to be able to work in areas that they are passionate about. But if you're someone who is constantly trying to catch up with retirement, who got started late or who has different influences or factors in your life where you haven't been able to contribute as much, you may never be able to do that," says Kelly Lannan, vice president, young investors for Fidelity.
But the good news is that time is on their side. Even the oldest millennials, those turning 40 this year, still have about 20 to 30 years before they retire.
Many millennials are juggling higher education and housing costs, but many are also taking advantage of investing and saving strategies, says Sarah Holden, ICI's senior director of retirement and investor research. Plus, millennials are typically more educated than previous generations, which will also likely help. Those with college degrees or higher typically out earn those without a bachelor's degree and also have more stable employment.
And it's never too late to start saving for retirement. Hathaway, for instance, met with a financial planner to help her navigate her financial goals and create a game plan. "I did get a good idea of what I really needed to do," she says, but admits even with a plan, she still sometimes gets down when thinking about her financial situation and the future.
"I just think that all I can do is keep doing what I'm doing and save as much as I can, stay on a budget as best I can, and try not to compare myself to everyone else."
