The earlier you start saving for retirement, the better. Most of us know that.
But how many actually put that wisdom into practice?
Recently, the Transamerica Center for Retirement Studies surveyed 5,493 workers as part of its report “Emerging From the COVID-19 Pandemic: Four Generations Prepare for Retirement.”
In that report, the center discovered the average age at which members of four generations — Generation Z, millennials, Generation X and baby boomers — started saving for retirement.
Among the workers surveyed, 78% said they are saving for retirement through an employer-sponsored plan such as a 401(k), or in an account outside the workplace — or both. Following is a breakdown of how each generation is tackling this challenge.
Generation Z
How Transamerica defined this generation: People born from 1997 to 2012
Respondents in this generation who are saving for retirement: 67%
When those respondents started saving for retirement: Age 19 (median)
When it comes to saving for retirement, Generation Z has really raised the bar.
As we previously reported, this generation is doing the best job of saving for retirement. Members of the age cohort typically start saving at an earlier age than all other generations, and despite their youth — and relative lack of affluence — about two-thirds are building a nest egg.
Millennials
How Transamerica defined this generation: People born from 1981 to 1996
Respondents in this generation who are saving for retirement: 76%
When those respondents started saving for retirement: Age 25 (median)
As with Generation Z, members of the millennial generation are doing a bang-up job of saving for retirement. More than three-quarters are saving, and on average they started at the tender age of 25.
The two youngest generations appear to have learned from the mistakes of their forebears and are not wasting time preparing for the future.
Generation X
How Transamerica defined this generation: People born from 1965 to 1980
Respondents in this generation who are saving for retirement: 81%
When those respondents started saving for retirement: Age 30 (median)
Generation X started saving a bit later than the youngsters behind them. But clearly, they realize time is now ticking on their ability to accumulate funds for their golden years.
A shade more than 80% of people in this age cohort are saving for retirement, which shows that they understand the urgency of building a nest egg.
Baby boomers
How Transamerica defined this generation: People born from 1946 to 1964
Respondents in this generation who are saving for retirement: 83%
When those respondents started saving for retirement: Age 35 (median)
Baby boomers are either in the thick of retirement or on the cusp of it. The time to save for retirement is dwindling fast.
Members of this generation got the latest start in saving among all the generations, and the percentage of those saving is not that much higher than in the two generations just behind them.
Still, they probably are doing just enough to get across the retirement finish line in good shape.
Looking for more tips on building a nest egg? Read “7 Simple Tips for How to Invest for Retirement.”
Chris Kissell
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