Retirement readiness looks drastically different across America’s generations, creating a financial landscape where age and opportunity don’t always align.
Gen Z workers are surprisingly ahead of the curve, with nearly half projected to be financially ready for retirement. These young savers started early, with a median age of 20 for beginning contributions, and they’re putting away 15% of their annual pay. An impressive 76% are already saving through 401(k) plans, and 88% feel confident they’ve saved enough. Despite carrying a greater debt burden than prior generations at the same ages, their stronger access to retirement plans gives them a better outlook. Many Gen Z savers favor low-cost index funds to keep fees down and match market returns.
Gen Z leads in retirement readiness, with 76% saving through 401(k) plans and contributing 15% of their annual pay from age 20.
Millennials face a more challenging picture with $65,000 in median household retirement savings and just $5,000 set aside for emergencies. About 24% have already tapped into their retirement accounts through hardship withdrawals, which chips away at long-term security. However, 64% would switch jobs for better financial benefits, showing they understand the value of strong retirement plans. More than half are still financially recovering from the pandemic and its aftermath.
Gen X carries the heaviest burden, with 69% falling behind on retirement savings and 47% markedly behind. Only 18% feel very confident about enjoying a comfortable retirement lifestyle. More than half have considered delaying retirement, recognizing that extra working years might be necessary to catch up.
Baby Boomers present a split reality. While 40% are projected financially ready with a median $270,000 saved, this readiness concentrates heavily among top earners. A sobering 57% expect to work until age 70 or beyond, or never retire at all.
Access to defined contribution plans makes an enormous difference across all groups. Workers with DC plan access are twice as likely to reach their savings goals. Universal DC access could boost Gen Z readiness by 47 percentage points and Millennial readiness by 29 points.
The broader picture shows Americans are adapting. The average retirement age has climbed to 64 for men and 62 for women. People are saving longer and delaying Social Security benefits, which improves readiness by 7 to 16 points. Part-time work after retirement is becoming common for extra income. Nearly half of Americans with DC plans are on track to maintain their lifestyles, proving that consistent saving makes retirement possible.
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