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Millennials & Gen Xers: Hack your retirement—Now

You don’t have to save like your parents. If you’re decades away from post-work years, 4 new approaches can help you gain sought-after financial security.

Man sitting on a couch wearing headphones while working on a computer.

Experts often say that it’s never too early to think about retirement, but traditional retirement savings advice is proving less effective for younger generations. They have different (and more) college debt obligations than their parents or grandparents, delaying long-accepted milestones such as buying a home or planning for retirement. Nearly 3 out of 4 millennials report not having any retirement savings plans, according to Pew Charitable Trusts.

Part of the problem might be that what worked for parents and grandparents doesn’t work for their adult children and grandchildren. How can Generation X and Millennials carve out their own approach and take actionable steps to create a more secure future? Consider these hacks to build a just-for-you retirement roadmap.

Treat Yourself Like A Freelancer

If you have a job with retirement benefits, great. Save the max that you can but save at least as much as you need to get the employer maximum match—in other words, set it and forget it. Then approach retirement as if you’re not employed by someone else and set up your own personal retirement savings plan.

To set some goals for yourself, you can use standard accepted retirement-savings wisdom, such as saving an amount equal to 10 times your estimated income at retirement. You can also use the guidance provided by a retirement calculator.

Crowdsource A Support Group

When it comes to setting any goal, having someone (or something) to be beholden to help make us feel better and stick to our goals. If it works for book clubs and exercise, it can also work for retirement. Gather a group of like-minded people to motivate each other and discuss goals and obstacles. You needn’t share bank account totals, but you can discuss approaches and difficulties with money. You may even pick a philosophy, such as the newly popular FIRE (financial independence, retire early) movement. FIRE adherents kick debt payments and savings into overdrive in the hope of retiring super-early, and their stories may inspire you and your friends to refocus on a savings-heavy lifestyle.

Know That Your Retirement Will Be Different

What was once retirement wisdom is changing quickly, say personal finance experts. For example, standard advice was to withdraw no more than 4 percent of retirement savings per year, but now experts recommend a 3 percent limit. In addition, many of the figures created as retirement milestones were designed with 30 years of retirement in mind. However, many younger generations expect to keep working, either traditionally or non-traditionally, well past traditional retirement age. Fifty-eight percent of Millennials plan to work in retirement, compared to 54 percent of each other generation. Work in retirement provides one way to reframe your approach to retirement itself as well as retirement savings, especially if you consider retirement as three stages: the go-go, slow-go, and no-go periods. At first, younger retirees take a go-go approach, spending more on an active lifestyle. Later years may find spending and traveling slowing down.

However you approach it, know that doing something every year to help build your retirement savings will help you establish regular savings habits and work toward building wealth and freedom for whatever your post-work years look like.

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