Millennials and Gen Zers said last year they want to retire in their 60s — now they're aiming for their 50s

It's "indicative of younger generations' attitudes towards work, savings, and retirement being fundamentally different."


The pandemic changed the way many people relate to money — and that's really showing up in how they think about retirement, according to a recent survey from Northwestern Mutual. The average age at which most people want to retire fell slightly from 63.4 to 62.6. For millennials and Gen Zers, it fell even more. Those two generations, on average, want to retire earlier than ever before, at ages 59.5 and 59.4, respectively.

When similar groups of people were asked the same question last year, the average age for retirement among millennials was 61.3, and it was 62.5 among Gen Zers.

Of all the subjects that Northwestern Mutual tackled in its annual survey this year, from the amount of debt Americans carry to the size of their savings account, "I think this is the most fascinating aspect of the entire study," says Christian Mitchell, chief customer officer at Northwestern Mutual. It's "indicative of younger generations' attitudes towards work, savings, and retirement being fundamentally different than previous generations."

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It's part of a broader trend that has left many people feeling more financially empowered since the pandemic started. Case in point: The average amount Americans have saved for retirement has also increased almost 13% from 2020, going from $87,500 to $98,800, according to the survey.

That's in addition to the very good returns from the stock market in the last 18 months: The S&P 500 is up more than 13% in 2021 alone.

"The pandemic has had this really profound psychological influence on folks," Mitchell says, particularly in the ways they relate to money and the need for savings in emergencies. "People are saving more. They are thinking about their retirement differently. They're thinking about the amount they need to save for retirement as being greater."

Younger workers see retirement differently: It's 'not even the same concept'

Another reason millennials and Gen Zers plan to retire earlier is that the understanding of work, in many ways, has changed. Prior to 2020, people under 40 were already known for being more willing to readily change jobs (and careers) than older generations, but the pandemic made it official, kicking off what has become known as The Great Resignation.

Recalibrating their relationship to work transfers to younger people's understanding of retirement and what they want to get out of their golden years, Mitchell notes. "It's not even the same concept that a boomer would think about," he says. "They may still be working in retirement, but it could be a passion project. It could be nonprofit. It could be something else related to their identity."

That hypothesis tracks with other data Northwestern Mutual collected in its survey: Of people who have decided to retire earlier than previously expected, a third, 33%, say it's to focus on hobbies or priorities outside of work.

That's a "seismic shift in attitude," Mitchell says. "In essence, what they're telling us is retirement for them is fundamentally different than it has been for previous generations." It could also mean that they'll be able to retire with less money saved, if they're willing to continue doing some more earning on the side.

Using the pandemic to reset relationships with money

When Northwestern Mutual released its findings for its annual survey in 2020, Mitchell said that Covid could provide people a great opportunity to "clean out the dirty basements" of their financial lives. After looking at the most recent responses from this year's survey, and reflecting on where people were a year ago, he concludes that a lot of them did just that.

"It absolutely happened," Mitchell says. "We see it in the data. We see more clients approaching financial advisors, more clients interested in receiving a financial plan."

However, in the same way that many people picked up new hobbies during the pandemic, like playing the guitar, Mitchell warns that improved financial habits (from saving more to paying down credit card debt to keeping a close eye on your cash flow) need to be practiced regularly to become a long-term habit. That discipline "can't be just a pandemic thing. You need to keep practicing," Mitchell says.

As it relates to saving for retirement, and retiring early, particularly for millennials and Gen Zers, it's crucial they think very long term and ask very specific questions that may not be top of mind for a younger person.

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"Are there unexpected eventualities in retirement that you should be preparing for?" Mitchell says. "Maybe it's a long-term care event. Maybe it's the reality that you think you're going to retire at 68, but you may need to retire at 62, because you've had a health incident or you need to help take care of a dependent."

While many younger people may want to retire before 60 now, Mitchell notes, over the decades, plans tend to change.

And time continues to be one of the most valuable assets in any younger person's financial portfolio, he points out. "They can really benefit from the power of the time value of money," Mitchell says. "Are they effectively positioning themselves not only to benefit from that upside scenario where their hopes and dreams come true, but taking the steps now to make sure that if they unfortunately experience a downside if there's a market correction?"

3 tips to maximize retirement savings

Whatever your goals are, and no matter what age you are, it's never too early to start thinking about retirement. For younger savers, planning for retirement can feel overwhelming, especially if you're just getting started. Luckily, many experts say it's OK to start small and build the habit incrementally.

Here are some easy ways to get started.

  • Take small, manageable bites. Instead of focusing on one big, overarching, and potentially overwhelming, financial goal, experts advise breaking it up into smaller, actionable steps that lead up to the bigger prize. "How do you eat an elephant? One bite at a time," Evelyn Zohlen, a certified financial planner in Huntington Beach, California, told Grow this spring. "How do you get to the point where you're saving 15% of your income annually? One percent at a time."
  • Track your cash flow carefully. Boosting your savings starts by knowing exactly how much money you bring home and how much money you spend, Chantel Bonneau, a certified financial planner with Northwestern Mutual, recently told Grow. It makes it easier to "live within your means," she says, and when you spend less than you earn, you can put that surplus in savings.
  • Take advantage of tools already at your disposal. Don't overlook tools that can, in the right conditions, help maximize savings, like employer-sponsored 401(k)s or buying stock from your employer at a discount. Even if your employer doesn't sponsor a retirement plan, you can still open your own IRA or Roth IRA if you qualify.

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