(The Hill) - Younger Americans in the workforce are setting aside more income than older generations for retirement but may need more guidance and education when it comes to hitting realistic retirement goals, according to recent research from investment management corporation BlackRock.
- Gen Z workers are saving an average of 14 percent of each paycheck for retirement.
- That’s compared to the 12 percent of earnings saved by Millennials, Gen X and Baby Boomers.
- But more than a third of Gen Z respondents said they believed savings of $250,000 would be enough to comfortably retire, signaling young American workers need better guidance to develop practical retirement goals.
BlackRock’s “Read on Retirement” report found Gen Z workers, those between the ages of 18 and 25, are saving an average of 14 percent of each paycheck for retirement. That’s compared to the 12 percent of earnings Millennials, Gen X and Baby Boomers stash away for retirement savings.
The survey found 69 percent of Gen Z workers feel they are on track for retirement and 97 percent said being on track positively affects their well-being in the present, although 72 percent said they would save less for retirement if faced with other big-ticket goals. They also had a more ambitious timeline to retire than older generations, with an expected retirement age of 63, compared to Baby Boomers who plan to retire at 65.
But more than a third of Gen Z respondents said they believed savings of $250,000 would be enough to comfortably retire, signaling young American workers need better guidance to develop practical retirement goals. That’s compared to half of Baby Boomers who said they would need at least $1 million to $3 million to comfortably retire.
Overall, the study found that retirement confidence has fallen over the past several years due to the COVID-19 pandemic and rising inflation. Sixty-three percent of Americans said they believed they are on track with their retirement savings, a decrease from 68 percent in 2021.
“As we experience new market headwinds that could impact the retirement security of millions of Americans, it’s a critical time for our industry to ensure people are planning for retirement with confidence and clarity,” Anne Ackerly, head of retirement at BlackRock, said in a statement.
The report includes surveys from more than 305 plan sponsors, 1,308 workplace retirement plan savers, 1,300 independent savers and 300 retirees in the U.S. Surveys were conducted March 25 through April 30.
By Joseph Guzman
July 26, 2022
