Why Young People Want To Retire Sooner

A survey by a wealth management company found that young wealthy people in Britain want to retire earlier than older wealthy people.

• The average planned retirement age for wealthy Britons is 63, but younger adults (18-34) aim to retire at 58.
• Younger adults are also saving more for retirement - almost 75% of them haven't stopped saving for retirement even though things are more expensive now.
• This might be because they're worried about affording senior care and healthcare later in life.
• Overall, everyone should plan for retirement, no matter how old you are.

The report says young wealthy Britons want to retire early for a few reasons:

Work-life balance: Young generations generally place a much higher value on free time and pursuing passions outside of work. They are looking to retire early to travel, spend more time with family, and explore hobbies.

Shifting workplace dynamics: The older generations had no problem with a 9-5 with added commutes. But the youth are seeking more flexibility, remote work options, or a work environment that aligns better with their lifestyle. Many see early retirement as a way to escape a dissatisfying work situation.

Financial independence: With careful financial planning and potentially different spending habits, young people often believe they can achieve financial security earlier in life. The downside is that many young people are not prepared for harsh market conditions or inflation.

Let's look closer at what's behind this trend:

Learning About Money: Many young adults don't feel comfortable managing their money. Only half (48%) feel confident, and many haven't learned about finances in school. This means more needs to be done to help young people reach their early retirement goals.

Saving Despite the Cost: It's harder to save when things cost more. But young adults are committed! On average, people under 35 are saving 12% of their income for retirement, compared to only 8% for people over 35.

Work-Life Balance Matters: These days, a good work-life balance is important! Surveys show that most young people (millennials and Gen Z) consider this a top priority when choosing a job. This is different from past generations who may have focused more on work itself.

Investing for the Future: Young Britons are aware of economic uncertainties. This shows in how they invest their money. Many are choosing sustainable and ethical investments (ESG funds) for the future. This means they care about the environment and society, while still growing their money.