Many baby boomers have done well for themselves financially. An Allianz global wealth report found that boomers — born from 1946 to 1964 — have become the wealthiest generation in history.
But across housing, investing, retirement planning and careers, millennials are rewriting the playbook boomers used. Not because the old rules were “wrong,” but because the math, the market and the workplace have all changed.
Here are four money habits millennials are moving away from and the factors driving those shifts.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
1. Millennials are choosing to rent over buying
For boomers, owning a home was the default wealth plan and a cornerstone of the American dream. Today, higher prices and elevated mortgage rates make the buy-vs-rent decision less clear — especially for millennials and younger generations.
The National Association of Realtors (NAR) tracks affordability and recently reported that the average monthly mortgage payment rose 3%, while the median price of a single-family home increased by the same amount.
Although mortgage rates have eased slightly from their peaks, they remain in the mid-6% range for a 30-year fixed loan — well above the 2% to 4% rates that many earlier buyers locked in. Add to that a steep drop in first-time buyers’ market share and a rise in the median first-time buyer age from 35 to 38, and you see why more millennials are renting longer to preserve cash flow and flexibility.
While some millennials might feel as if buying a home is not an option right now given their finances, others are choosing to continue renting and put more money toward investments and other goals instead.
2. Moving money out of 'safe' accounts and into investments
Boomers were more likely to lean on CDs, savings accounts and annuities, which are solid tools in the right context. Millennials, by contrast, are starting earlier with market investing, often using low-cost index funds and target-date funds inside 401(k)s and IRAs.
According to Vanguard’s 2024 How America Saves report (PDF), more younger workers are enrolling in retirement accounts and choosing professionally managed allocations that help keep their investments on track.
Millennials and Gen Z are also taking advantage of user-friendly mobile apps to invest and of commission-free trading platforms, as well as robo-advisers, which all help streamline their investing strategy.
3. Planning for retirement without pensions or Social Security
Private-sector pensions that once guaranteed lifetime income have largely disappeared. Today, only about 15% of private-industry workers have access to a defined-benefit plan. That shift has pushed millennials toward self-funded retirement vehicles such as 401(k)s and IRAs.
On the Social Security side, trustees project the Old-Age and Survivors Insurance (OASI) trust fund will be depleted by 2033 under current law. After that, payroll taxes would still cover most benefits, but uncertainty around the program is nudging millennials to save more on their own.
Financial expert Suze Orman recommends younger savers consider Roth 401(k), 403(b) or Roth IRA savings options since they can reduce your future tax risk and avoid required minimum distributions later in retirement.
While a traditional 401(k) is a great option, Orman points out that this account uses pre-tax dollars that you can deduct each year for tax savings. But you might be in a higher income tax bracket now and when you will need to take required minimum distributions or RMDs, which are treated as ordinary income.
4. Leaving behind the idea of staying at one company for life
Boomers often built careers — and benefits — by staying put. Millennials, however, entered a job market where skills, not loyalty, drive pay and opportunity. That shift has led to shorter stints at individual companies and more lateral moves. Today, the median job tenure across workers is under four years, reflecting a labor market that rewards mobility and continuous upskilling.
Flexibility also matters. Many younger workers prefer hybrid setups and value employers that support well-being and growth, even if that means switching jobs to get it. Surveys consistently show Millennials prioritize flexibility and development over long-term lock-in.
Millennials aren’t rejecting wealth-building; they’re updating it to fit the times. As this shift shows, there’s more than one way to reach the same goal: financial security.
In the end, money is personal. Your choices should reflect your unique situation, values and goals.
Related Content:
-
IRS Says You Made a Tax Return Mistake? A New Law Could Help You Fight BackTax Law Updated taxpayer protections change what the IRS must explain on error notices and how long you have to respond.
-
What to expect from the global economy in 2026The Kiplinger Letter Economic growth across the globe will be highly uneven, with some major economies accelerating while others hit the brakes.
-
What You Need to Do With Your 401(k) Before 2025 Is OverBefore 2025 ends, check your 401(k) contributions, investments, and catch-up eligibility to lock in this year’s tax savings and employer match.
-
The Top 22 Gifts for Grandkids from Walmart in 2025From PlayStation to Labubu, you'll find the hottest gifts of 2025 for your grandkids at Walmart this year. Some of them are up to 78% off.
-
CD vs. Money Market: Where to Put Your Year-End Bonus NowFalling interest rates have savers wondering where to park cash. Here's how much $10,000 earns in today's best CDs versus leading money market accounts.
-
Meet the World's Unluckiest — Not to Mention Entitled — Porch PirateThis teen swiped a booby-trapped package that showered him with glitter, and then he hurt his wrist while fleeing. This is why no lawyer will represent him.
-
Smart Business: How Community Engagement Can Help Fuel GrowthAs a financial professional, you can strengthen your brand while making a difference in your community. See how these pros turned community spirit into growth.
-
Smart Money Moves Savers Should Make in 2026These steps will get you on the road to achieving your 2026 savings goals.
-
How Much Would a $50,000 HELOC Cost Per Month?Thinking about tapping your home’s equity? Here’s what a $50,000 HELOC might cost you each month based on current rates.
-
My First $1 Million: Self-Employed Trader, 50, San FranciscoEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Waiting for Retirement to Give to Charity? Here Are 3 Reasons to Do It Now, From a Financial PlannerYou could wait until retirement, but making charitable giving part of your financial plan now could be far more beneficial for you and the causes you support.
