Disclosure: We scrutinize our research, ratings and reviews using strict editorial integrity. In full transparency, this site may receive compensation from partners listed through affiliate partnerships, though this does not affect our ratings. Learn more about how we make money by visiting our advertiser disclosure.

If you’ve read anything in the news about what a Millennial retirement will look like, you’ve noticed a widening preparation gap between Millennials and their predecessors at a similar age.  Why is this?

Stated simply, most Millennials don’t get excited by the prospect of delaying gratification and saving consistently to reach some eventual goal 40+ years in the future.  Blame long-term unpredictability and social media.

Instead, we want a more fulfilling life, bursting with experiences.  We want financial independence without having to follow this traditional retirement path.  Truthfully, we just don’t know what tomorrow will hold.

As a result, we’re more inclined to delay gratification a bit less than our predecessors and indulge more.  YOLO (you only live once), right?

And while this might be true of our generation, there are some other frictions Millennials have with preparing for a traditional retirement.

Namely, the amount of student loan debt we took on and the low wages most of us have come to accept.  Not all of us qualify for the Public Service Loan Forgiveness program.  Then again, not many do at all.

Another difficulty we face is career advancement.  Baby Boomers are living longer and therefore choosing to work longer if they have the opportunity.

This keeps their minds engaged while also providing more financial resources for their needs.  Certainly a win for those who can continue working.

However, this effect can have implications for the career opportunities of those waiting in line behind them.  If Boomers are able, many are ‘semi-retiring’ and remaining attached to the labor force.  And why shouldn’t they?

If they are in need and have the skills necessary to perform the required tasks, they shouldn’t retire.

While not always the case, many companies should welcome keeping their experienced workers longer.  Doing so would prevent facing a knowledge and skills gap from these departing workers.

Stated differently, phasing into retirement adds flexibility in the workplace.  It allows companies to continue meeting their customers’ needs while transferring knowledge from departing workers to their successors.  However, this is a double-edged sword.

For those seeking employment, these positions are likely being filled for longer by someone who can’t afford to retire at this time.  This delays bequeathing their roles to those next-in-line.

This forces the Millennials and Gen-Xers below them in the corporate pecking order to wait longer for promotions and pay raises until Boomers finally walk out the door.

Millennials and Boomers need those higher wages sooner rather than later if we want to learn how to build wealth through compounding returns.

We also have a tenuous relationship with work because we can’t seem to find it as easily as our predecessors.  Instead, we’re forced to learn new high-income skills, build our personal brand and take up side hustles to make up for the difference to have any hope of getting ahead.

This is where I see the opportunity for Millennials to redefine what normal retirement will look like for us.  I don’t foresee us sailing off into a sunset to leave everything behind like so many Boomers hope to do.

I see us using unique skills and experiences to side-step solely pursuing traditional corporate advancement. I see us forging our own way.  I see us pursuing financial independence as a means for reaching the Millennial retirement we deserve.

Financial Independence and Millennial Retirement: Redefining the Concept

For the reasons laid out above, the retirement definition will need to shift for Millennials.  That’s partly because when you look at the amount of Millennial retirement savings, the results aren’t great.

But it’s also because we can’t expect the same financial support programs that have helped others.  We don’t have the guarantee of a social safety net there to catch us if we fall behind.

Unsure of how the future will unfold, I find myself wanting to forge my own way built upon self-reliance, despite not necessarily knowing how.

The truth is, we don’t know what may come to pass- but it likely isn’t the status quo, because our country can’t afford it.  Because of these trends, our retirement plans must change.

With difficulty seeing what’s in our immediate future, let alone 40+ years down the road, we face hard money decisions our forebearers simply didn’t.

How many Baby Boomers had to navigate student loan refinancing or the Federal student loan system writ large?  My guess would be a lot fewer than us.

Baby Boomers went to school in droves at affordable prices.  They managed to make respectable livings by advancing their careers, earning pay raises, and saving money along the way.

And those who didn’t?  About 25% of Baby Boomers cite having a pension available to them.  Many will also receive Social Security and maybe have a bit tucked away in their 401k and individual retirement account (IRA) plans.

This isn’t to say all Boomers will live comfortable retirements.  There are many who still need to work to make ends meet because they don’t have enough saved for retirement.

In the Millennial vs. Baby Boomer retirement debate, the point I am trying to stress is we are being forced to rely more on our own preparation for our own retirement than our predecessors.

We are a generation forced to make its own way in the world- more so than Baby Boomers or Gen-Xers.  It is up to us to seize this challenge and capitalize.

While our story is still being written, it’s clear- because we’re waiting to start saving, we won’t have an easy time.  Compound this further because Millennials have a fear of stocks last seen in those who grew up during the Great Depression.

If we can’t change the hand we’ve been dealt but want a different expected outcome, we need to do something different.  Something unconventional.  We need a new vision for what retirement can be for our generation.

Financial Independence Means Living on Your Own Terms

When I think about retirement, I don’t target some specific age when I know I’ll leave the workforce.

Despite setting aside the maximum in my retirement accounts and knowing how to save money for other priorities, I don’t know if I’ll have a ‘magic day’ where I permanently part with my coworkers and head for the back nine.

And if I’m being honest, that sounds boring.  I don’t find driving a golf cart into the rough looking for an errant ball as the ultimate reward for my life’s work.

Instead, I’d prefer to reduce my stress now by pursuing more projects or work I find rewarding.  Assuming adequate preparation for retirement, I have no intention of punching the clock one last time, strapping on my gold watch, and disengaging for my remaining golden years.

Therefore, I propose Millennials redefine the retirement definition to one which means pursuing financial independence and entrepreneurial activities.  That’s the mission of my site and how I plan to live my life.

If we redefine retirement to mean reaching financial independence, we can challenge conventional wisdom.  We can redefine how to earn, spend, save and invest not only our money, but our time.  Doing so would establish a solid financial foundation from which to live our best lives.

Along the way, Millennials will need to learn as much as they can about finances and question the accepted wisdom about money, work, and retirement.  For our generation’s new retirement definition, most current advice is incorrect, incomplete, or out-of-date.

Instead, we should create strategies for reaching financial independence.

4 Strategies to Reach Financial Independence as a Millennial

  • Control Our Spending and Learn How to Budget

The easiest dollar earned is the dollar not spent.  Controlling our spending with practical money management skills and financial literacy are the items within our control and are the biggest levers we can pull to increase our saving rate.

  • Learn How to Start Investing Money

Conventional wisdom says to reach a safe retirement by the age of 67 (current age for full Social Security benefits), you should save 15% of your income for 40+ years.  That’s not a bad choice.

15% could get you to those endless rounds of golf.  However, there’s no guarantee Social Security will exist in its current form when we reach our 60s.

If you want to live the life you want, I’d suggest tripling that savings rate.

Perhaps consider starting to invest money in target date funds or other passive index funds, and realizing financial independence won’t happen overnight.

Several free stock apps have made this more accessible than ever (and give free stocks for signing up). However, it is imperative to learn how to live within your means and develop side hustles because this will go a long way.

  • Have Side Hustles and Income Assets to Create Variable Income

We should develop unique, in-demand skill sets and find side hustles which create variable income. Further, we should invest in income-generating assets to diversify our income sources.

Building these side hustles can reduce our dependency on a permanent job and give us freedom to pursue what we want most in life.  Another way to ween off one income is to create passive income streams.

  • Create Passive Income Streams

Passive income is the best type of income because you can earn it while you sleep.  Also, specific types receive the same preferential tax treatment as long-term capital gains.

The general definition of passive income contains many forms: real estate, dividends, alternative investments options, bonds, etc.

While some passive income has different tax rates, understand not all receive the preferential tax treatment.  However, creating as many various ways to make money without having to play an ongoing, active role in earning it is paramount for financial independence.

To reach financial independence, we should have investments and income streams which produce enough income to cover our cost-of-living and leave room for rises in the cost of living.

If we’re lucky down the road, we can throw in slimmed down Social Security and Medicare benefits for good measure.

Learning to budget, invest in index funds on Robinhood or the best Robinhood alternatives, develop profitable side hustles, and build passive income streams which work for your benefit is the surest path to a secure Millennial retirement.

Financial Independence Means Having No Regrets

I wonder how many current retirees look back in regret about having worked a job they didn’t like for so many years and wished they’d done things differently?  My bet would be a lot.

Life doesn’t often give you mulligans, so I don’t intend to postpone my satisfaction in the hopes of one day reaching a traditional retirement.  I want to pursue financial independence and have the financial freedom to do what I want.

If Millennials are smart, we’ll learn to hustle and save.  This is what many of us will have to do to enjoy a Millennial retirement.  This is also the way to get what we want most of all: living life on our own terms.

Readers: What do you see as a Millennial Retirement? How are you planning to reach it? Please leave your thoughts and comments below as well as please consider subscribing to this blog.

About the Author

Riley Adams is a licensed CPA who worked at Google as a Senior Financial Analyst overseeing advertising incentive programs for the company’s largest advertising partners and agencies. Previously, he worked as a utility regulatory strategy analyst at Entergy Corporation for six years in New Orleans.

His work has appeared in major publications like Kiplinger, MarketWatch, MSN, TurboTax, Nasdaq, Yahoo! Finance, The Globe and Mail, and CNBC’s Acorns. Riley currently holds areas of expertise in investing, taxes, real estate, cryptocurrencies and personal finance where he has been cited as an authoritative source in outlets like CNBC, Time, NBC News, APM’s Marketplace, HuffPost, Business Insider, Slate, NerdWallet, Investopedia, The Balance and Fast Company.

Riley holds a Masters of Science in Applied Economics and Demography from Pennsylvania State University and a Bachelor of Arts in Economics and Bachelor of Science in Business Administration and Finance from Centenary College of Louisiana.