But it’s not all good news. The increased saving could be because Millennials have no expectations of receiving employer-sponsored pension plans when they retire. In 1981, 84% of full-time workers at large companies participated in a pension plan; by 2020 that percentage plummeted to only 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 counsel at the law firm Eversheds Sutherland, where she focuses on retirement and investment policy.
Lifestyle goals also play a factor in increased saving, said Montez. Millennials are more mobile than prior generations, so investing in a home isn’t necessarily a priority, and their money tends to be allocated into 401(k) plans.
About three-quarters of Boomers and Gen Xers expect to own a home in retirement, while fewer than half of Millennials do. More than 60% of Millennials will prioritize travel in retirement, the Schwab study found.
Millennials also said they will spend less time managing their finances and investments once they retire, the study found, because they’re not as focused on continuing to accumulate wealth later in life as Gen Xers and Boomers are.
“Millennials think of retirement less as a target savings number and date and more like a state of mind or target 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 about 25% of Millennials plan to invest in digital currencies, compared with about 5% of Boomers.
Advisors remain skeptical of such changes.
“Retirement success comes from tried and true things like diversification, having ownership in the growth of the US and global economy through traditional stocks – things that have cash flows and generate growth,” said Rob Williams, managing director of financial planning, retirement income and wealth management at Schwab. “Right now crypto doesn’t qualify as having that.”