Last Updated on January 16, 2020
- Millennials are looking to freelancing and side hustles to establish income.
- Baby Boomers are less agreeable to discuss the challenges of saving for retirement.
- Both Baby Boomers and Millennials can save more with the Solo 401(k) plan.
As the holiday season is in full swing, and thoughts turn to 2019 winding down, it’s an excellent time to also fashion a retirement strategy to begin in 2020. Although it’s popular to talk about an entitled generation and OK Boomers, each has a lot more in common than they have different. Each generation worries about the day to day and the long term. But what do retirement strategies look like for each? And how can savvy investors benefit from the views of both?
Retirement is Freedom
When asked by a major insurance company, members of the Boomer and Millennial generations defined retirement as “Freedom” and “Stress-free.” But getting to achieve that comes in different ways. Both generations list a self-funded 401k as their primary expectation for income in retirement. Boomers have been funding their employer 401ks for the whole length of their working lives.
Retirement Outlook for Millennials
Millennials, however, are a more digital generation and are looking outside just the traditional employer 401ks. They have their own businesses, side hustles, and hobbies they’re trying to make money at, and their own way of saving for retirement. Some also believe Social Security might not be available to pay out to them when they do retire. Many are interested in Solo 401k accounts, as they are the employer and employee of their companies.
Saving for retirement can be difficult when you don’t know exactly how much you’ll need. But both Boomers and Millennials are thinking about retirement, with it more prevalent to the older generation that will reach it first. But although Boomers are closer, Millennials are more willing to look for information and discuss the challenges they face. Both generations agree with the wisdom that saving more makes the most sense.
Across the generations, retirement is looked at as being longer and costing more. People expect to live longer lives, and want to be more active during their retirement than they may have been able to be while they were working. Since it’s closer for the older generation, that means using the funds from their corporate sponsored retirement savings accounts.
Solo 401(k) for Millennials and Baby Boomers
But for the younger generation, many are looking at retirement with the hope that it can not only be stress-free but also allow time to pursue their passion projects. That means they’re saving money now but may also continue to earn money as they retire from corporate careers and look ahead to making choices for themselves.
The Solo 401k will work for a writer selling her articles, an alpaca farmer selling wool, a dairy farmer selling milk and cheese, a psychic selling fortunes, a computer wizard selling his ability to create websites, reports or spreadsheets. Millennials who feel like their current corporate situation doesn’t meet their spiritual or emotional needs can plan on having a second career when they retire from the first. The Solo 401k will help save money because of the ability to contribute as both the employer and the employee.
Start Early, Acquire Information
Both generations can learn from each other when it comes to retirement planning. Boomers can adopt the flexibility that Millennials have, and they can in turn adopt the steadfastness from the older generation. Starting early, finding out as much information as possible about your options at any age, and keeping an eye on what your money is doing can lead to a very happy retirement.