"In fact, the younger generation may be more prepared to retire than their older cohorts. Nearly half of Gen Z workers (aged 24-28) are projected to maintain their current standard of living in retirement, slightly ahead of the 40% projected for baby boomers (aged 61-65) approaching retirement, according to a new study from investment management firm Vanguard. Millennials were also slightly ahead of the older generation (aged 29-44), with 42% on track for retirement. Gen X fell slightly behind at 41% (aged 45-60)."
"Part of the financial preparedness is due to expanded Defined Contribution (DC) plans offered by employers. For younger generations, the plans could make saving easier and more effective through features such as auto-enrollment, automatic escalation, and investing in target-date funds. In addition, a separate Vanguard study found that DC plan participation and eligibility rates are at all-time highs, which could help workers build financial security over time."
Nearly half of Gen Z workers (aged 24-28) are projected to maintain their current standard of living in retirement, outpacing baby boomers (40%), millennials (42%), and Gen X (41%). Vanguard used 2022 Survey of Consumer Finances data and roughly 2,700 working U.S. households to estimate generational retirement readiness and income adequacy. Economic pressures such as soaring inflation, high living costs, and stagnant wages are creating retirement challenges for older cohorts, while younger savers appear to internalize those lessons. Expanded Defined Contribution plans with auto-enrollment, automatic escalation, and target-date funds, plus record DC participation and eligibility, are bolstering younger workers’ savings.
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