Millennials, let’s be honest. Retirement planning isn’t something that you think about every day. Between juggling careers, paying off student loans and managing today’s cost of living, it may feel like retirement is a lifetime away. But here’s the truth: if you’re in your early 30s to mid-40s, now is exactly the right time to get serious about planning for it. Your future self will thank you for the steps you take today.
If you were born between 1982 and 1996, you’ve got one key advantage: time. With a longer life expectancy than previous generations, you have more years for your money to grow. Compound interest is your friend — the earlier you start, the more time your investments have to multiply. Even small amounts set aside now can make a significant difference down the road.
Let’s face it: the landscape has shifted. Gone are the days of guaranteed pensions and there are fewer government and corporate safety nets than previous generations enjoyed. Today’s millennials are facing a world where defined contribution plans — like 401(k)s and IRAs — are the norm. The responsibility of planning and saving for retirement falls squarely on your shoulders. There are fewer government and corporate safety nets than previous generations enjoyed.
At Birchwood Financial Partners, we understand that saving for retirement can feel like a stretch when you’re managing everyday expenses and debt. Here are some of the biggest challenges our millennial clients face.
On the bright side, millennials have access to more financial tools and investment options than ever before. The growing popularity of newer assets, such as Bitcoin and other cryptocurrencies, has fundamentally changed how many millennials think about investing. From what I see, most millennials aren’t thinking about “retirement planning” in the traditional sense. Instead, they are focused on growing their money, whether that’s through stocks, bonds, crypto or alternative assets.
It’s important to remember that not all growth strategies are created equal. While crypto and alternative assets may be exciting, they may not be ideal for your long-term retirement goals.
There’s always talk about the Social Security Trust Fund running out of money, and younger clients often ask whether Social Security will be there when they retire. Here’s my take: yes, changes are likely coming, but they will probably be gradual. I don’t expect to see significant changes for anyone 55 or older. Younger generations might see changes such as extending the Full Retirement Age (from today’s current age of 67), increasing Social Security payroll taxes and income-based eligibility requirements for Social Security recipients. In my opinion, Medicare may become an even bigger concern than Social Security, but both are worth watching as you plan for your future.
The key takeaway: don’t rely on Social Security as your primary income source during retirement. Plan as if it will be a supplement, not the foundation.
With all these competing priorities — student loans, high living costs, delayed milestones — how do you start saving for the future without sacrificing the present?
Here’s my practical approach:
While it’s true that millennials face unique challenges, you also have unique advantages and opportunities. Flexibility, technology and new investment options are all at your fingertips. What matters most is getting started. Time is your greatest asset, and the earlier you begin planning for retirement, the more options you’ll have down the road.
Remember, it’s not about making perfect decisions. It’s about making informed decisions that reflect your goals and values. Your future self will thank you.