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Millennials saving more for retirement than other generations, partly due to doubts of financial security

A survey said most millennials want to spend time with others and work on hobbies as they approach retirement.

KNOXVILLE, Tenn. — Millennials are around 40 years old now, and many are starting to plan for life after leaving the workforce.

A survey from Charles Schwab, a major investment company, said Millennials are pouring more of their money into retirement savings than previous generations did, partly because many doubt they will be able to stay financially secure later in life.

"They are thinking about it in different ways because they are significantly pessimistic about their ability to achieve financial security," said Erin Freeman, a leader of a public relations company that works with investment companies. "They've been putting more money away now, especially in comparison to their Baby Boomer parents and Generation X."

The study identified four perspectives among Millennials as they plan for retirement. It also said most Millennials are expected to start entering retirement in 2050.

The first is called the "relaxed minimalist" which heavily emphasizes saving money now and building up wealth before 2050, so they don't need to worry about money after retirement. After retiring, she said most of these kinds of Millennials want to focus on their hobbies and spending time with others.

The study said this group is the largest among the four perspectives and places less focus on finances than it does on relationships and relaxation.

A few Millennials also follow the "practical achiever" perspective, who strategize their wealth. She said they look for new ways to save money, such as cryptocurrency, and she expects these kinds of retirees to continue finding ways to save money into retirement. 

The "on-trend friends" are expected to continue following consumer trends and spend more time shopping than their peers and are expected to value financial stability as a way to maintain a healthy spending and entertainment budget.

Finally, the "high-tech jetsetters" are expected to continue nomadic and fast-paced lifestyles, relying heavily on technology to stay connected with family and friends as they adventure around the world during their retirement age.

The four major perspectives sharply contrast with Boomers and Gen Xers because fewer than half of Millennials are expected to own a home when they retire. Around 75% of the two previous generations are expected to value stability through homeownership.

So, while Boomers generally value stability and consistency in retirement, the study said Millennials are less likely to share those values. Instead, since they are less likely to own a home, Millennials are expected to prioritize travel and experiences during retirement.

"What makes Millennials so different from other generations is that they think of their retirement as a targeted lifestyle that they wish to achieve, instead of thinking about a targeted savings number that they need to get to," said Freeman. "Millennials are very focused on their lifestyle, and that is important to their future planning."

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