It's 2050: 4 types of millennial retirees are starting their "second life"

Although many millennials got an early start on saving while in their mid-20s, they are likely to spend less time managing their personal finances and investments in retirement. The saving and retirement habits of millennials differ not only from those of other generations but also from their peers.

Charles Schwab’s 2022 Retirement Reimagined study predicts that millennials likely will fall into four distinct retirement personas by 2050, when a large portion of them are shifting to retirement:

Practical achievers (12 percent to 22 percent) will prioritize financial security more than their peers. They will continue placing importance on digital investments and currencies, extensively researching their assets, staying abreast of macro-economic trends and investing evenly in stocks and cryptocurrencies.

On-trends friends (13 percent to 23 percent) will prioritize keeping up with the latest consumer trends and spend more time and money on shopping than their peers. Like practical achievers, they value financial security more than the other two personas as a way to maintain a healthy spending and entertainment budget.

Relaxed minimalists (31 percent to 41 percent) will value deep relationships more than other personas. They will place less focus on finances and devote more time to hobbies, relaxation and me-time.

High-tech jetsetters (24 percent to 34 percent) will prioritize travel and be more open to long-term travel than their peers, trusting technology to keep up with friends and family as they move about in retirement. Their curious nature, tenacity and commitment to the latest gadgets will carry through into retirement.

“As with any generation, every individual will have a different vision for their ideal retirement, but the key for everyone is to start saving and investing early,” said Rob Williams, managing director of financial planning, retirement income and wealth management at Charles Schwab.

“If you dream of constant travel, make that a specific line item in your retirement plan to ensure you have the funds to make it happen. If you want to maintain exposure to higher-risk assets like digital currencies in your retirement portfolio, think about how to balance that with more traditional investments that can provide you with a reliable source of income when you don’t have a paycheck.

“And finally, you prepare for retirement to enjoy it, but it’s important to have a solid income and distribution strategy so you don’t risk running out of money in retirement.”