Workforce interruptions are emerging as a significant retirement planning challenge for Millennials, with half reporting they have stepped away from the labor force for more than a year and 52% expecting to work beyond their anticipated retirement age of 60, according to a new TIAA Institute report.
According to “Bridging the Gaps in Retirement Expectations,” surveyed Millennials had an ambitious list of financial milestones they expected to achieve before retirement. Sixty-one percent of surveyed Millennials expected to have enough saved to cover an unexpected expense or emergency, 45% expected to pay off their mortgage, and 44% expected to pay off any nonmortgage debt. The TIAA report stated that Millennials’ focus on such milestones was significantly higher than other nonretiree groups surveyed.
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However, even with large financial ambitions, the biggest savings disruptions Millennials face are their ongoing career changes, which often are not factored into their retirement plans.
Half of Millennials surveyed for the report have left the job market for longer than one year, with 20% leaving due to a career change, 18% leaving to care for children, and 17% leaving due to burnout.
“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,” says Tim Pitney, TIAA’s head of lifetime income distribution. “The best thing that advisers could do … [is] look toward these interruptions not as an exception, but … maybe [they] can plan a little bit better for it with things like personal catch-up guidance.”
Other important resources advisers can leverage, according to Pitney, are tools tailored for certain types of interruptions. These include investing in caregiving benefits, necessary credit, Social Security, portable benefits that follow workers across jobs, and other flexible retirement options.
“Sometimes, the workforce interruption doesn’t mean they come back to the same employer, and what we’ve seen is that 20% of Millennials have cashed out the retirement savings entirely when they’re changing jobs, otherwise known as leakage,” Pitney says. “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.”
Those challenges come as younger workers face a retirement system that looks markedly different from the ones previous generations relied upon.
For example, 40% of current retirees said they depend on their employer pension plan, whereas only 26% of pre-retirees surveyed expect a pension plan. Additionally, confidence in Social Security as a reliable income option during retirement is largely declining among younger generations.
According to the report, 94% of Baby Boomer respondents expected to use Social Security, compared with 75% of Gen X respondents, 64% of Millennial respondents, and 51% of Gen Z respondents.
“I just think that the confidence in that system is eroding. … Certainly that system is in flux,” Pitney says. “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.”
TIAA, in partnership with Ipsos, surveyed 1,591 U.S. adults from ages 22 through 75 in July 2025.
