Northwestern Mutual: Young Americans Start Saving Sooner, Want To Retire Earlier Than Boomers
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Gabrielle Olya
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Molly Sullivan
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Young Americans are getting a head start on retirement prep compared to older generations, a new study finds. According to the latest Northwestern Mutual Planning & Progress Study, Gen Z started saving for retirement at an average age of 24, while millennials started saving at an average age of 29. The average boomer didn’t start saving for retirement until nearly a decade later, with the average age at 37.
With a head start on saving, younger generations are hoping to get a head start on retirement, too. While the average boomer plans to retire at age 72, Gen Z hopes to retire at age 61 and millennials hope to retire at age 64.
Here’s a closer look at why younger generations are starting to save sooner, and whether this will enable them to retire earlier than the traditional retirement age of 65.
Why Americans Are Building Long-Term Savings at a Younger Age
Gen Z and millennials are often derided for being financially irresponsible, but the data seems to imply otherwise. These generations are starting to build their retirement savings in their 20s, decades in advance of their planned retirement. One reason they’re starting to save earlier than older generations could be more widespread access to financial information.
“We’re living in a time where information is more accessible than ever, so Gen Z has grown up with financial conversations happening in real time — from TikTok money tips, to seeing their own families financially struggle through things like the 2008 recession or even the 2020 pandemic,” said Michelle Bruno-Burton, a financial representative with Northwestern Mutual based in Atlanta. “They’re learning by watching and absorbing, and in turn, have become more vigilant when it comes to their finances.”
Younger Americans also have access to more tools that make saving for the future easier.
“Gen Z is using online tools, like automatic savings apps, to build habits that last,” Bruno-Burton said.
Can Gen Z Realistically Retire at 61?
With an average starting age of 24 and an ideal retirement age of 61, that gives Gen Z 37 years to build retirement savings. But is 61 a realistic goal age? Bruno-Barton believes that it is possible to achieve with the proper planning.
“If a goal is clearly defined, your financial plan should reflect those goals,” she said. “With tax-efficient strategies, it’s absolutely possible! Starting earlier gives your money more time to grow, which is a huge advantage. But retiring at age 61 isn’t just a number — it’s a vision. And bringing that vision to life might mean making some intentional choices along the way, like being mindful about lifestyle spending or being strategic about investing.”
While it’s possible to retire early, Gen Z also needs to keep in mind longer life expectancies when planning for retirement. According to the study, more than one-third (34%) of Gen Zers think it’s likely they’ll live to 100; less than one-quarter (23%) of boomers think it’s likely they’ll live to 100.
Bruno-Burton noted that life expectancy is “an important piece of the puzzle.” Given a longer time in retirement, Gen Z may just opt for a different version of retirement than we are used to.
“Retirement isn’t about stopping work completely — it’s about having the financial freedom to not have to work, but rather stepping into something you choose to do that brings consistent joy, purpose or impact,” she said. “That could look like consulting, mentoring or even finally launching that passion project.”
Gen Z Is the Most Confident Generation When It Comes To Retirement Planning
The majority of Gen Z believes they will be financially prepared for retirement when the time comes, with 63% feeling confident that they will be prepared — more than any other generation. For comparison, 54% of millennials, 46% of Gen X and 56% of boomers think they will be financially prepared for retirement.
While Bruno-Barton admires Gen Z’s confidence, she noted that there must be a strategy in place to back this up.
“Life is full of surprises, as well as a wealth of diverse experiences, so structured planning can help turn that confidence into long-lasting financial security,” she said. “Reliance on fluctuating markets can introduce risk to their savings. To maintain their confidence, ongoing financial literacy about effective retirement strategies, market conditions and personal finance is key.
“They need to build knowledge around not just saving,” Bruno-Burton said, “but also investing wisely to ensure they can meet their long-term goals.”
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Sources
- Northwestern Mutual, “Planning & Progress Study“
- Michelle Bruno-Burton, Northwestern Mutual
