Global Investor Study 2019

Are millennials on target to retire at age 58?

Young investors are saving 11.2% of their salary for retirement, only slightly less than the average for all generations, find the Schroders Global Investor Study


David Brett

David Brett

Investment Writer

Millennials (18-35 year olds) are investing 11.2% of their salary for retirement and are relying less on state contributions than older generations (over 35 years olds), a major study has found.

The report, which covers 30 countries, also found millennials were hoping to retire with an average age of 58.2 years old.

Schroders Global Investor Study (GIS) 2017, which surveyed more than 22,000 people who invest, also pointed out a shift in approach to retirement among the younger generation.

Millennials will still rely on the state pension, company pensions and other savings to contribute most to their retirement but to a much lesser extent than older generations.

Millennials said that they expected the state pension to provide 14% of the retirement income, compared with 21% for older generations.

Millennials are also hoping to work part-time before they retire, with 71% declaring this as an aim compared to 57% among older generations.

They are also more inclined to turn a hobby into income once they retire, with 35% making this a goal compared to 25% across older generations.

Expected/actual sources of income in retirement

expected/actual sources of income

Lesley-Ann Morgan, Head of Retirement at Schroders, said:

“The financial situation of millennials is daunting. We hear about it all too often. It’s therefore heartening to see young investors, in many respects, demonstrating a mind-set to retirement that’s very different from their parents.

“The young investors in our study are saving more than 11% of their income, which is only slightly lower than the average across the generations. It is a notable achievement when this generation face so many pressures on their finances.

“There also seems to be a growing understanding that the face of retirement is changing. They show a greater inclination to turn a hobby into an income, for instance, once they have retired. They are also more willing to accept that the state will only provide a sliver of their retirement income.

“Overall, it seems many millennials are taking personal responsibility seriously when it comes to retirement saving.”

Are millennials saving enough for retirement?

Millennials are saving, on average, 11.2% of their income for retirement, according to Schroders Global Investor Study. Older generations are putting away slightly more, at 11.6%.

Millennials might be saving less now but they have more time on their side.

Schroders’ Lesley-Ann Morgan said: “The most powerful tool available to savers is time. Start saving at an early age and it makes an incredible difference to the eventual size of your retirement savings. The miracle of compounding, where you earn returns on your returns, adds up over 30 or 40 years of saving.”

countries where millennials save the most of their salary

The level of retirement income savers can expect depends on:

  • The amount contributed (and when).
  • The returns achieved.
  • How the money is invested after retirement.
  • The length of time over which money will be withdrawn.

The chart below, from Schroders calculations, shows the returns needed to achieve certain outcomes.

The analysis assumes a starting age of 20 with a £25,000 salary that rises in line with inflation. It shows the real annual returns – the growth above inflation - that would be needed to achieve two levels of income:  50% or 66% of your salary when you retire. These are typical bands that people aim for. It also assumes they will retire at 60 and draw on the money for around 21 years, on average.

Our analysis shows that someone who started saving for retirement at age 20 would need to save between 12% and 15% a year if they wanted to retire on 50% of their salary.

How much savers need to save depending on returns achieved


Source: Schroders Retirement. For illustrative purposes only. Starting age 20 years, retiring at 60. Starting salary of £25,000 assumed to grow at the rate of inflation. Replacement rate based on current annuity rates generating an income of 66% and 50% of final salary respectively. 

If a saver’s portfolio delivered a long-term average of 3.9% above inflation – a plausible, but stretching target for investments, then a contribution rate of 15% of salary could be enough provide a 66% replacement of salary.

Of course, the numbers are different for those who start saving at later ages.

When will I retire?

Globally, millennials, on average, said they wanted to retire at 58.2 years old, which is earlier than non-retired older investors who said they would like to retire at 61.8 years old. However, millennials said the age they actually expected to retire at was 61.5 years old.


More results on retirement expectations are published in the full report. The links below take you to other elements of the Schroders Global Investor Study 2017.

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Important information: Schroders commissioned Research Plus Ltd to conduct, between 1 and 30 June 2017, an independent online study of 22,100 people in 30 countries around the world, including Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, the Netherlands, Spain, UAE, the UK and the US. This research defines “people” as those who will be investing at least €10,000 (or the equivalent) in the next 12 months and who have made changes to their investments within the last 10 years.

Important Information:
This material has been issued by Schroder Investment Management Australia Limited (ABN 22 000 443 274, AFSL 226473) (Schroders) for information purposes only. It is intended solely for professional investors and financial advisers and is not suitable for distribution to retail clients. The views and opinions contained herein are those of the authors as at the date of publication and are subject to change due to market and other conditions. Such views and opinions may not necessarily represent those expressed or reflected in other Schroders communications, strategies or funds. The information contained is general information only and does not take into account your objectives, financial situation or needs. Schroders does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this material. Except insofar as liability under any statute cannot be excluded, Schroders and its directors, employees, consultants or any company in the Schroders Group do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this material or any other person. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. You should note that past performance is not a reliable indicator of future performance. Schroders may record and monitor telephone calls for security, training and compliance purposes.