A generation ago, the traditional retirement model was the only retirement model. But these days, younger people are moving away from it fast. There are new options now on how people plan out the course of their lives and how they choose to retire

Using the traditional retirement model means you save and invest for as long as you can. After accumulating a sizable retirement fund, and reaching the retirement age which is usually 65 years, you can relax and enjoy a life of leisure. If you are not good at saving, then social security provides you some form of retirement safety net, although it’s really never enough.


Growing research on retirement shows that very few people WANT to retire, live in leisure and not work anymore. This is thanks to the “hedonic adaptation,” where people quickly adjust to their new realities and realize that retirement is boring. The younger generation is certainly moving further and further away from this traditional retirement model. The media also shows an older generation that is still actively working and don't feel they need to conform to traditional retirement examples.

Traditional Retirement Model
Image Source: en.wikipedia.org

The Traditional Retirement Model

For most people, work is what they do for survival, and as long as they are physically capable, they will want to do it. In this “modern” world, people are schooling when they are young in order to do sophisticated work for the rest of their lives.

What Is The New Retirement Model For Millenials?

After watching their parents and grandparents work for more than 30 years, millennials have now understood that a job will never make you wealthy. They live at a time where if you follow your heart and commit yourself to build something amazing, you do not have to do mediocre jobs for the majority of your life.


These millennials are disruptive and purpose-driven individuals who totally believe in themselves and that anything is possible. So, instead of waiting until they are 65 to achieve financial freedom, they are achieving this much earlier.

How Are Millenials Achieving Financial Freedom Earlier?

They find new ways to invest money and do not rely on pensions

The majority of millennials do not know, and neither do they want to know how a pension plan looks like. This is because most companies are actually not offering this to their employees as a benefit option. They now rely on accounts such as Thrift Savings Plans (TSPs), 401Ks, and 403Bs. There are deferred compensation accounts that do not provide the employee with a guaranteed income when they retire like pension plans used to.

Using the TSPs, 401Ks, and 403Bs is also a way of investing for the long-term, which is not a bad option at all. However, when you are deciding the companies to work for, you must first find an employer that offers the kind of program you want. This enables you to invest in your future as you want.


In addition to finding companies that offer excellent saving options, millennials usually need to look for establishments that offer them stock options as well, so they can build on their portfolios. Being awarded stock options gives them the time and energy to spend on the new company. This is also one of the smartest ways to reach your retirement with excellent savings as having stock in a business you work for also allows your net worth to increase in the said company.

They are always looking for ways to increase their income outside of their jobs

Traditionally, an employee would depend on their jobs for money, and then keep depending on the same company after retirement to keep them going through pension. Millennials nowadays have decided to venture out of the mainstream working environment and have looked for multiple streams of income. Whether this is through a second job or a side hustle, it doesn’t matter. It is hard enough to save with one stream of income, and therefore having multiple sources of income is the key to financial freedom. Here are some of their options

  • Drive an uber or a lyft over the weekends – this is a very simple and easy way of bringing in additional income while you still control your time.
  • Management of social media accounts for a small business can also be an excellent part-time job since most of these millennials are always online.
  • Working part-time as a writer on Upwork or Fiverr can also give you a good source of income.
Traditional Retirment Model
Image Source: en.wikipedia.org

Why The Traditional Retirement Model Is Being Ditched Conclusion

Millennials believe that saving will never make you rich. Rather, investing shall get you there. You can never rely on savings to build your wealth, and therefore they do not believe in what their parents keep saying: “Save, save, save!” That is simply not going to cut it with them. For these and other reasons highlighted above, the younger generation is moving away from the traditional retirement model.