Millennials and the Dream of Early Retirement: A Practical Guide

Retirement might seem like a distant dream for Millennials (those born between 1981 and 1996) amidst student debt, rising housing costs, and global economic uncertainty. Yet, this generation can realize that dream with the right wealth management and retirement planning strategies.  

And let’s not forget this generation stands to inherit approximately $27 trillion from earlier generations. 

We’ve identified five financial concerns that Millennials have about retirement:

1. How Can I Save Enough for Retirement with a Limited Income?
2. Will Social Security Still Be Around When I Retire?
3. How Do I Balance Retirement Savings with Other Financial Goals?
4. What’s the Best Way to Invest for Retirement Given Market Volatility?
5. How Can I Minimize Taxes on My Retirement Savings?

Our blog will examine these concerns in more detail and then discuss possible solutions that may be appropriate for overcoming them. Our Washington, DC, financial advisors at Brown|Miller Wealth Management offer these strategies to address each concern.

How Can I Save Enough for Retirement with a Limited Income?  

You may be a high-earning millennial. However, your income may be constrained by cost-of-living expenses, lifestyle choices, or other financial factors, such as student debt repayments and caring for parents. This can cause concern about saving enough for retirement.  

If you have $500K or more of investable assets, the challenge is accelerating growth while managing other cash-flow considerations. The good news is that time and compounding can be your ally.

Example 1: The power of compounding:

Let’s say you started with $500K in a tax-deferred savings account when you were 35: if you leave those funds untouched for the next 30 years with an average return of 7%, your savings could grow to $1.9 million.

Example 2: The power of tax-advantaged accounts:

• If your income increases are limited, you must be as efficient as possible with your savings efforts. Consider maxing out your 401(k) contributions with employer match (e.g., $10,000 on a $150K salary) and funnel $10K yearly into a taxable brokerage account that invests in a diversified portfolio of ETFs, generating tax-deferred gains that become millions over the decades.
• Use a backdoor Roth IRA—convert $7,000 from a traditional IRA annually (after tax)—to build another source of tax-free growth, leveraging your $500K base for compounding returns without any contribution limitations.

Work with a Washington, DC, financial planning team who can help you construct an investment management plan that ensures your various savings accounts grow into a robust nest egg over time.

Will Social Security Still Be Around When I Retire? 

There has been ongoing concern about the future of Social Security, given some projections of fund depletion by 2035. As a high-earning millennial in Washington, DC, this may be a concern, especially if you plan on using Social Security as an income supplement once you retire. Current benefits average $22,800 yearly, but reforms might cut this by 25% or more.

Suppose you have other assets and income sources planned for retirement. In that case, reliance on Social Security should be minimized while making it a bonus, not a cornerstone of your retirement income.

Here are some considerations:

• Max Out Tax-Advantaged Retirement Accounts (and then some): Start with maxing out your 401(k) or 403(b)—in 2025, that’s $23,500 if you’re under 50. If your income allows, contribute to a backdoor Roth IRA to lock in tax-free growth. Once you’ve filled those buckets, consider a taxable brokerage account. The earlier you start stacking these accounts, the more you’ll benefit from compound growth—and the less you’ll care what happens with Social Security ten years from now.
• Build Equity Outside Traditional Financial Assets: Owning assets that produce income—like rental properties, stakes in private businesses, or even royalties— can give you more flexibility later in life. Many high earners focus solely on securities-based investments, but building income streams outside your paycheck and the securities markets helps reduce long-term dependency on any one source of support, including government benefits based on your  contributions.
• Create a Flexible Withdrawal Strategy: This one’s about what you do with your assets. A flexible withdrawal strategy—paired with tax planning—lets you control more of your taxable income in retirement. That means you can be strategic  about which accounts you draw from while reducing unnecessary taxes and smoothing out your income streams. It also puts you in a better position to treat Social Security as a bonus, not a necessity. Having this plan created now can help to ensure you stick with your plan as you approach your retirement years.

How Do I Balance Retirement Savings with Other Financial Goals?

You may find that you’re juggling investments by saving for retirement and accumulating assets for other goals, like funding your kids’ education. Here are a few strategies to consider:

• Automate a “Minimum Viable” Retirement Contribution: Start by calculating how much you need to save at a minimum to stay on track for retirement—typically 15–20% of your gross income if you’re starting in your 30s. Automate your  401(k), Roth IRA, or taxable brokerage account contributions. Doing this first means you’re not sacrificing long-term growth, even if other goals (like buying a second home or funding college education) take priority in the short run.
• Use Buckets to Separate—and Simplify—Your Goals: Create separate “buckets” for each goal: one for retirement, one for a down payment on a second home, one for short-term spending, and so on. Assign a dollar amount or monthly  contribution to each. This lets you progress without guessing where your money should go on a month-to-month basis. For high-income earners, this approach  helps you avoid lifestyle inflation while funding what matters most now and in the future.
• Layer Tax Efficiency into Your Strategy: Max out tax-advantaged accounts (401(k), HSA, IRA) where possible, but use taxable accounts for goals that do not impact the investment of tax-deferred assets. If you’re also aiming to retire early or take a sabbatical, building a taxable investment account alongside your retirement savings gives you more control over timing and withdrawals.

Consider partnering with Brown|Miller’s Washington, DC, retirement planner team.

What’s the Best Way to Invest for Retirement, Given the Uncertain Returns  of the Securities Markets? 

Market swings can be stressful, as we all fear substantial losses that could derail our retirements. However, it’s important to note that because you have a longer time horizon until retirement, staying the course is important. History shows that equities  (e.g., the S&P 500, 10% historical return) often beat inflation long-term despite occasional dips in prices.

Here are two smart retirement investing strategies for high-income millennials who want to grow their wealth during volatile markets:

• Use a Core-Satellite Investment Approach: To combat probable market adjustments, your core portfolio should have a strong core of diversified, low-cost index funds or ETFs that can provide more stability. Then, use a smaller portion of your portfolio—the satellite—to make more targeted or riskier investments, like overweighting the technology or energy sectors of the economy. This keeps your foundation solid while allowing for increased upside with some of your assets.
• Automate, Rebalance, and Keep Emotions in Check: Establish goals for your investments and rebalance them regularly to maintain a desired level of risk. This helps you stick to your plan and avoid emotional decisions when market prices decline. Volatility can work in your favor through dollar-cost averaging, where you buy more shares when prices are lower. Staying focused on pursuing long-term goals beats trying to time the market.

How Can I Minimize Taxes on My Retirement Savings?

As CFP® professionals in Washington, DC., we believe that having a tax plan in place today can help you avoid year-end surprises and improve your retirement savings efforts. This should include blending taxable, tax-deferred, and tax-free accounts into  one optimized strategy.

• Max Out Tax-Advantaged Accounts (and Use the Backdoor Roth if Needed): If  you’re hitting income limits for direct Roth IRA contributions, the Backdoor Roth IRA can be a valuable workaround. Contribute to a traditional IRA and convert it to a Roth. While you’ll pay taxes on the conversion assets, future growth, and distributions will be tax-free.
• If your employer offers a 401(k)—especially a Roth 401(k) option—consider maxing that out. You can also ask about mega backdoor Roth contributions, which let you save even more after-tax dollars and convert them.
• Use an HSA (Health Savings Account) for Triple Tax Benefits: An HSA is one of the most tax-efficient tools available if you have a high-deductible health plan. Contributions are tax-deductible, growth is tax-deferred, and qualified medical withdrawals are tax-free. You can also treat it as a supplemental retirement account—saving receipts for later and letting the  balance grow.
• Take Advantage of Strategic Roth Conversions in Low-Income Years: If you ever take a sabbatical, start a business, or experience a temporary drop in income, those years can be ideal for converting pre-tax IRA or 401(k) dollars into a Roth IRA at a lower tax rate. Doing this gradually over time can lower your future required minimum distributions (RMDs) and give you more flexibility in retirement.

As your wealth grows, so can the complexity of managing it, so it pays to work with a team of tax planning CFP® professionals in Washington, DC, who can craft a tax efficient retirement plan for you.

Connect with the Brown|Miller team today for more information.

Disclaimer: This article is intended for informational purposes only, and not to be a client specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs, and  investment time horizon. This report is for general informational purposes only and is not intended to predict or guarantee the future performance of any individual security, market sector, or the markets generally.

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