Here’s How Behind Gen Z and Millennials Are in Saving for Retirement

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Saving for retirement is important for everyone, but especially for younger people who face uncertainty over the future of Social Security. One of the program’s trust funds will likely run out of money in a decade, reducing current funding levels by at least 23%. To address the problem, some lawmakers have suggested cutting benefits or raising the full retirement age — but only for millennial and Gen Z workers.

In truth, nobody should depend on Social Security alone to fund their retirements. For nearly all recipients, the monthly payments aren’t big enough to pay all the bills. But a better-than-average Social Security check at least provides an extra financial cushion. If checks grow smaller in the future, Gen Zers and millennials will have to rely more heavily on private retirement savings plans than previous generations.

Deciding how much you should save for retirement depends on who you ask. Although there is no single formula, many financial advisors recommend basing your savings on your age and income.

For example, Thomas Brock, CPA and expert contributor for Annuity.org, said younger Americans follow these guidelines:

• 20 to 30 years old: One to two times your annual salary
• 30 to 40 years old: Three to four times your annual salary
• 40 to 50 years old: Five to seven times your annual salary

To put those targets in context, suppose you earn the median U.S. salary of $1,139 a week or $59,228 a year (per U.S. Bureau of Labor Statistics data). For rounding purposes, here is what you should have saved according to age group:

• By age 30: $60,000 to $120,000
• By age 40: $180,000 to $240,000
• By age 50: $300,000 to $420,000  

Those sound like good targets — but not many people actually hit them. The vast majority of millennial and Gen Z workers are way behind in those savings goals, according to a GOBankingRates survey of 1,005 U.S. adults conducted in January 2024. In fact, many reported no savings at all.

When asked how much they currently have saved for retirement, here is how younger Americans answered:

18 to 24 Years Old

• $0: 28.09%
• Less than $50,000: 44.94%
• $50,000 to $100,000: 19.10%
• $100,001 to $200,000: 7.87%
• $200,001 to $300,000: 0.0%
• $300,001 to $400,000: 0.0%
• $400,001 to $500,000: 0.0%
• $500,001 to $750,000: 0.0%
• $750,001 to $1 million: 0.0%
• $1 million+: 0.00%

25 to 34 Years Old

• $0: 30.17%
• Less than $50,000: 37.07%
• $50,000 to $100,000: 12.93%
• $100,001 to $200,000: 4.31%
• $200,001 to $300,000: 3.45%
• $300,001 to $400,000: 0.86%
• $400,001 to $500,000: 3.45%
• $500,001 to $750,000: 2.59%
• $750,001 to $1 million: 2.59%
• $1 million+: 2.59%

35 to 44 Years Old

• $0: 34.88%
• Less than $50,000: 36.05%
• $50,000 to $100,000: 8.72%
• $100,001 to $200,000: 2.33%
• $200,001 to $300,000: 4.07%
• $300,001 to $400,000: 2.91%
• $400,001 to $500,000: 5.23%
• $500,001 to $750,000: 2.33%
• $750,001 to $1 million: 1.16%
• $1 million+: 2.33%

As the data above show, nearly three-quarters (73%) of those ages 18 to 24 have less than $50,000 in retirement savings, which is a target you want to shoot for by your mid-20s. About eight in 10 of those ages 25 to 34 have less than $100,000 in retirement savings. A similar percentage of those ages 34 to 45 have less than $100,000 — and many of them should have at least $240,000 saved for retirement.

Equally concerning is the fact that most millennials and Gen Zers are behind on their own retirement savings goals.

The GOBankingRates survey also asked respondents how much they need to save up to retire comfortably. Nearly 80% of those ages 18 to 24 said they would need at least $500,000 and more than one-third said they would need at least $1 million.

For respondents ages 25 to 34, about three-quarters said they need at least $500,000 in savings to retire comfortably and nearly four in 10 (38.79%) said they need at least $1 million. For respondents ages 35 to 44, more than three-quarters said they need at least $500,000 and 31% said they need at least $1 million.

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