Young Americans Anticipate Retiring Early, Pursuing New Careers

Younger generations expect to retire earlier than their older counterparts and are more likely to anticipate spending their retirement years pursuing new careers, engaging in hobbies and learning new things.

That’s according to a new Vanguard Digital Advisor study, “Generational views on financial advice, investing, and retirement.”

Having flexibility to do what you want and having more time with family and friends ranked highly across all generations in terms of what defines a successful retirement. However, Gen X and young boomers were slightly more interested in maintaining their pre-retirement lifestyle than Gen Z and Millennials, who placed a higher value on taking classes and learning new things during retirement.

Younger generations also expect to have more time to pursue their desires during retirement. According to the study, 67% of Gen Z and 61% of Millennials think they will retire before the age of 65, compared with 54% of Gen X and 39% of young boomers.

Nearly one-third of Gen Z hopes to retire even earlier — before the age of 60 — compared with 22% each of Millennials and Gen X and only 7% of young boomers.

Only 29% of young boomers plan to continue working in the same field once they reach retirement age, while Gen X (45%), Millennials (56%) and Gen Z (55%) believe they will continue.

The younger two generations expressed more interest in pursuing a new career or starting a business at retirement age than Gen X or young boomers. Only 14% of Gen X and 8% of young boomers indicated they are likely to start a business once they reach retirement age.

All generations indicated they would continue to work at retirement age to stay active and alert, although Gen Z expects to continue to work because they enjoy what they do. Both Gen Z and young boomers also plan to continue to work to have a sense of purpose.

However, COVID-19 has had a distinct impact on views of financial security in retirement across all generations. More than half of respondents from all age groups indicated the economic climate during the pandemic has made them less confident that they will be financially secure during retirement. Young boomers were most concerned about the pandemic’s impact on their security, with 61% indicating they are less confident now.

The younger Gen Z and Millennial respondents were slightly more optimistic, with 32% and 31% respectively expressing confidence in their financial security during retirement amid the pandemic.

Despite the short-term turmoil caused by COVID-19, two-thirds of respondents from all generations believe they are saving enough to be financially secure during retirement.

Young boomers expressed the most confidence in their retirement savings with 25% saying they are very confident and 52% saying they are somewhat confident.

Gen X is the least confident, with only 19% saying they are very confident and 39% saying they are somewhat confident that they are currently saving enough to be financially secure in retirement.

The survey was conducted online between May 12 and May 21 and included input from 1,568 individuals, about half of which were Millennials.

Kristen Beckman is a freelance writer based in Colorado. She previously was a writer and editor for ALM’s Retirement Advisor magazine and LifeHealthPro online channel. She also was a reporter for Business Insurance magazine covering workers compensation topics. Kristen graduated from the University of Missouri with a degree in journalism.