Gen Z starts as early as 19: Comparison with Millennials, Gen X and Baby Boomers

Eva Katalin /

Of the four generational cohorts currently in the workforce, Gen Z is probably the least likely to depend on Social Security to fund their retirement. Social Security cash reserves should be fully sold out around 2034while even the oldest Gen Z workers will still not be 40.

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This largely explains why many Gen Zers begin saving for retirement as teenagers — much earlier than previous generations, according to a new report from the Transamerica Center for Retirement Studies titled “Emerging From the COVID-19 Pandemic: Four Generations prepare for retirement.

The report, released earlier this week, found that 67% of Gen Z workers are saving for retirement through 401(k) or similar employer-sponsored retirement plans and/or outside the workplace. The median age at which Gen Zers start saving – 19 – is much younger than the median start age of millennials (25), Gen Xers (30) and baby boomers (35).

“Gen Z workers are young and have decades to grow their retirement savings,” said Catherine Collinson, CEO and President of the Transamerica Institute and TCRS, in a press release. “Additionally, they will change employers several times during their careers and will likely spend time self-employed, so they need to be diligent about managing their retirement savings, especially during transitions.”

The TCRS study was based on a survey of nearly 5,500 workers by The Harris Poll. The survey included 398 Gen Z workers, 2,326 millennials, 1,631 Gen X workers, 1,100 baby boomers and 38 workers born before 1946.

More than half of Gen Z respondents (52%) expect their main source of retirement income to come from self-funded savings accounts such as 401(k), 403(b) and IRAs (40% of respondents) or other savings and investments (12%). Nearly three-quarters fear Social Security won’t be there for them when they’re ready to retire.

A separate survey conducted earlier this year by BlackRock found that, on average, Gen Zers have an expected retirement age of 63.6, nearly two years younger than the average baby boomer in 65.9 years old. More than a third of Gen Z respondents to this survey said they would need less than $250,000 to retire comfortably. In contrast, nearly half of baby boomers said they would need $1-3 million.

The TCRS survey revealed similar differences between the generations. For example, while the vast majority of Gen Z respondents doubt they will be able to rely on Social Security in retirement, 40% of Baby Boomers expect Social Security to be their primary source of retirement income. retirement.

Gen X workers have the least confidence in Social Security, with 78% saying they fear Social Security won’t be there for them when they’re ready to retire. Among millennials, 73% said they fear Social Security won’t be there when they’re ready to retire — the same percentage as Gen Z respondents.

One way to solve the problem is for policymakers to develop strategies to strengthen the retirement system, Collinson said. But the private sector will probably play the most important role.

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“The private sector must continue to innovate products, services and solutions that can help people live, work, save and retire better. We’re all in this together,” Collinson said.

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This article originally appeared on Retirement savings: Generation Z starts as young as 19 – comparison with millennials, generation X and baby boomers