Is retirement a real possibility for GenX and Millennials?

By Rebecca Lake

Reviewed by James Heflin

Jul 25, 2023

Read time: 2 min

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If you've been steadily working on your retirement plan, give yourself a pat on the back. Saving for the future can be a real challenge, especially when inflation is pushing budgets to the brink.

But what about your kids? Will they be able to retire? 

Without a crystal ball, there's no way to say for sure. But there are some good reasons to think that the answer will be yes. 

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Why retirement isn't off the table for today’s younger workers

When it comes to your kids and their prospects for retirement, they've got a few things going for them. In terms of the positives, here's what they’ve got in their corner:

  • Time is on their side. Have you ever heard the saying that time in the market is more important than timing the market? If not, here's what it means: the more time you have to invest, the better. Why? Because more time to invest means more time for interest to compound, and time is something our kids still have plenty of. 

  • 401(k) plans aren't going away. Employers know how important it is to attract and retain talent, and one way they do that is by offering competitive retirement plans. Thanks to automatic enrollment, it's incredibly easy for the next generation of workers to start saving for retirement, even if they're not investing experts yet. 

  • Jobs aren't the only way to make money. While plenty of young adults are pursuing traditional career paths, there are just as many out there looking for other ways to generate income. Between passive investing, side hustles and all of the opportunities the gig economy affords, next gen-ers have plenty of options for earning extra cash, some of which (hopefully) will end up in a retirement account. 

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Why retiring could be harder for future generations

Is the retirement outlook perfectly bright and rosy for younger people? Not exactly. 

Retirement doesn't look like it used to. Plenty of people are working longer, either by choice or out of necessity. And there's lots of doom and gloom in the news about what Social Security might look like another decade down the road. 

Here are some potential obstacles that could make retiring more of a "hope I can" vs. "I definitely will" goal:

  • Wages are slow-growing. The Great Resignation turned a not-so-flattering spotlight on the state of wages in the U.S. Fact is, they've been pretty flat for decades. While lots of employers have taken the initiative to start paying workers more, wages still can't keep up with inflation. In a nutshell, even if the next generation is earning more, they're also paying more for things they need, so there’s no guarantee that they'll be able to save for retirement.

  • College tuition is broken. Getting a college education is practically a must these days for landing a good job. But it's expensive out here and getting more so every day. And if you're so busy saving for retirement that you haven't had much extra cash for a college fund, your child might have to borrow to earn a degree. Paying down a boatload of loans means delaying their retirement savings. 

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Here's the tldr version: retirement for the next generation might be a mixed bag. But you can help your kids get on the right track by teaching them some financial basics now. For example, if you haven't given them the rundown on how to make a budget and track spending yet, that's a good place to start.

And if you need a little help with that yourself, check out the MoLO app. MoLO shows you all of your spending accounts in one place so you can simplify your financial life. 

Rebecca Lake - Author

Rebecca is a senior contributing writer and debt expert. She's a Certified Educator in Personal Finance and a banking expert for Forbes Advisor. In addition to writing for online publications, Rebecca owns a personal finance website dedicated to teaching women how to take control of their money.

James Heflin - Author

James is a financial editor for Achieve. He has been an editor for The Ascent (The Motley Fool) and was the arts editor at The Valley Advocate newspaper in Western Massachusetts for many years. He holds an MFA from the University of Massachusetts Amherst and an MA from Hollins University. His book Krakatoa Picnic came out in 2017.

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