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Published: Apr 22, 2022 3 min read
Lovely couple standing in front of their new house
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Millennials are less likely to own a home in retirement than Gen Xers or boomers, despite starting to save for retirement from a much younger age.

A study released Tuesday by investment firm Charles Schwab dives into some of the key differences between the three generations. Among its findings: Only 48% of millennials are likely to “enjoy stability through homeownership” in retirement — compared to 74% of Gen Xers and 75% of boomers.

Schwab analysts, who surveyed 5,000 Americans and combined their responses with investor and economic data, chalk up this generational housing gap to a shifting perception of what it actually means to "retire."

When it comes to planning for retirement, millennials are actually doing better than their predecessors, the study found. The typical millennial starts building a nest egg in their mid-20s — nine years earlier than boomers.

But while boomers and Gen Xers overwhelmingly expect to settle down in an owned home, 61% of millennials prioritize travel in retirement, the study found.

“Millennials think of retirement less as a target savings number and date and more like a state of mind or target lifestyle,” Jonathan Craig, a managing director at Charles Schwab, said in a news release.

This is the right approach, according to Schwab, because the rules of retirement are changing fast.

For one, pension plans — a retirement staple in previous decades — are virtually non-existent in today’s workplace, putting the onus on workers to save for their retirement likely through a 401(k) or Individual Retirement Account (IRA). Social Security benefits are changing too: According to a recent retirement study from the financial firm Principal, most workers aren’t confident that Social Security benefits will be there to support them in retirement, and a whopping 80% say they plan to continue working throughout their retirement.

"Retirement isn’t really a switch you flip at a certain age anymore,” the Schwab report states. “It’s a financial state that allows for the flexibility to make work optional.”

Millennials are also saddled with debt — especially student loan debt — and face other financial hardships that are keeping their homeownership levels down below the national average (not just in their retirement projections). This could help explain why their perception of retirement is so different from previous generations.

In other words, if homeownership isn’t working out for millennials now, why should they expect it to when they’re retired?

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