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.
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1. Millennials are choosing to rent over buying
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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
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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.
