Retirement Savings: 40% of Boomers Know How Much They Need To Retire — Are Millennials and Gen Z Any More Confident?
Written by
David Nadelle
Edited by
Daria Uhlig
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Regardless of when you start saving, steady progress is the key to a comfortable retirement. However, how much the average American will need to hit financial independence is up in the air across all generations.
While many experts agree that saving 15% of income per year (including employer contributions) is an appropriate savings goal, a recent survey claims that not only do most people not know how much they should have when they retire, many don’t care.
According to the 23rd Annual Transamerica Retirement Survey, conducted among a sample of 5,725 workers for a nonprofit company, 40% of baby boomers guessed the amount they need to save for retirement. Among participants who provided a retirement estimate, 46% of Gen X and millennials and 45% of Generation Z workers also guessed their needs.
“That’s a big worry because retirement security is shaky enough for many workers and not taking it seriously will have repercussions,” said Catherine Collinson, CEO and president of Transamerica Institute and the Transamerica Center for Retirement Studies, which conducted the survey, as reported by Yahoo Finance.
Additionally, the TCRS study found that 42% of those surveyed agreed with the statement: “I prefer not to think about or concern myself with retirement investing until I get closer to my retirement date.” Not surprisingly, the numbers who agreed with this statement decreased as they got older and closer to retirement, with 56% of Gen Z, 47% of millennial, 40% of Generation X and 25% of baby boomer participants agreeing with the statement.
“That’s stunning,” Collinson noted. “It’s not really negotiable to prefer not to think about it. Estimating savings and retirement income needs and goal setting serves as the basis for future financial security.”
While younger Americans are more confident that they’ll be financially prepared for retirement when the time comes, more Gen X and boomers are discouraged about how long their savings will last.
Americans feel they’ll need $1.27 million to retire comfortably, according to a new Northwestern Mutual Planning & Progress Study. This amount is up from the $1.25 million recorded in last year’s study. More worryingly, the average amount that U.S. adults have saved is just $89,300, 7% of their estimated mark.
This wide savings gap is a concern among American workers who may feel they have more on their plates than preceding generations.
“Retirement is top of mind for most Americans, more so than it’s ever been before, given what’s going on in the economy, the markets, and with inflation,” Aditi Javeri Gokhale, Northwestern Mutual’s chief strategy officer, head of institutional investments and president of retail investments, told Yahoo Finance. “There’s a growing realization that ‘I need more money for retirement, and I’m not able to retire at the time that I thought I was.'”
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