Millennials Face Delayed Retirement Due to Disruptions

Millennials are reshaping retirement expectations as career interruptions become a common hurdle, a new TIAA Institute study shows.

Career breaks force many to rethink retirement age

According to the analysis titled “Bridging the Gaps in Retirement Expectations,” half of the surveyed Millennials have been out of the labor force for more than a year. The survey, conducted in July 2025 with 1,591 U.S. adults aged 22‑75, found that 20% left their jobs to pursue a new career, 18% stepped away to care for children, and 17% cited burnout as the reason.

These interruptions are influencing retirement plans. More than half—52%—now say they expect to keep working past the age of 60 they originally targeted. The shift reflects a broader trend where younger workers anticipate a longer working life than previous generations.

“When we think about some of these workplace interruptions, I think people rarely plan for them. They’re usually relatively sudden, somewhat unexpected and can have an impact to financial resources available later in retirement,” said Tim Pitney, TIAA’s head of lifetime income distribution.

Financial milestones remain ambitious

Despite the setbacks, Millennials continue to aim high for pre‑retirement goals. The study notes that 61% expect to have enough savings to cover an unexpected expense, 45% plan to pay off their mortgage, and 44% hope to clear any non‑mortgage debt before retiring.

These aspirations are higher than those of other non‑retiree groups surveyed, indicating a strong desire to achieve financial security despite the volatility of modern work patterns.

Advisors are urged to consider these goals when helping clients manage career gaps. Pitney suggests that personal catch‑up guidance and tools tailored to specific interruptions—such as caregiving benefits, portable benefits, and flexible retirement options—can improve outcomes.

One notable issue is “leakage,” where a similar share of Millennials cash out their retirement savings entirely when changing jobs. This not only reduces the amount available for later life but also reflects a lack of continuity in benefits across employers.

“It’s not just the gap itself and the lack of contributions that they’ve been able to make during that time, but, rather, they may have misappropriated or not handled that event correctly,” Pitney added.

In the middle of these findings, a cautious view emerges: as more Millennials encounter fragmented employment, the pressure on traditional retirement savings may grow, prompting a shift toward more adaptable, portable financial products. If advisers can anticipate these patterns, they might help clients avoid costly withdrawals and maintain a steadier path toward their goals.

Shifting confidence in retirement pillars

The report also highlights a decline in confidence for the classic “three‑legged stool” of retirement income. While 94% of Baby Boomers expect to draw on Social Security, only 64% of Millennials share that expectation, and just 51% of Gen Z respondents do.

Employer‑provided pensions are similarly less common. Forty percent of current retirees rely on a pension plan, compared with only 26% of pre‑retirees surveyed who anticipate such support.

“I just think that the confidence in that system is eroding. … Certainly that system is in flux,” Pitney said. “Past generations were able to think of the ‘three‑legged stool.’ They had Social Security, they had an employee pension and then they had their own workplace or personal savings to lean into. … It’s definitely a different time for Millennials.”

These shifts suggest that Millennials will need to lean more heavily on personal savings and flexible benefits to fill the gaps left by diminishing pension coverage and waning trust in Social Security.

Financial planners are encouraged to integrate portable benefits and explore options like catch‑up contributions, which can help mitigate the impact of career breaks on long‑term savings.

Confidence in retirement has become a central concern for many workers.