Retirement Savings: Gen Z Is Getting Started as Young as 19 — How It Compares to Millennials, Gen X and Boomers

Eva-Katalin /

Of the four generational cohorts currently in the working world, Gen Z is probably the least likely to depend on Social Security to fund their retirement. Social Security’s cash reserves are expected to be fully depleted around 2034, when even the oldest Gen Z workers still won’t have turned 40 years old.

This goes a long way toward explaining why many Gen Zers are starting to save for retirement as teenagers — much sooner than earlier generations, according to a new report from the Transamerica Center for Retirement Studies titled titled “Emerging From the COVID-19 Pandemic: Four Generations Prepare for Retirement.”

The report, released earlier this week, found that 67% of Gen Z workers are saving for retirement through employer-sponsored 401(k)s or similar retirement plans and/or outside the workplace. The median age at which Gen Zers are starting to save — 19 years old — is much younger than the median starting age for millennials (25), Gen Xers (30) and boomers (35).

“Generation Z workers are young and have decades to grow their retirement savings,” Catherine Collinson, CEO and president of Transamerica Institute and TCRS, said in a press release. “In addition, they will change employers many times throughout their careers, and likely spend time in self-employment, so they must be diligent in managing their retirement savings, especially during transitions.”

The TCRS study was based on a survey of nearly 5,500 workers conducted by The Harris Poll. The survey included 398 Gen Z workers, 2,326 millennials, 1,631 Gen X workers, 1,100 boomers and 38 workers born before 1946. 

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More than half of Gen Z respondents (52%) expect their primary source of retirement income to come from either self-funded savings accounts such as 401(k)s, 403(b)s, and IRAs (40% of respondents) or other savings and investments (12%). Nearly three quarters are concerned that Social Security will not be there for them when they are ready to retire.  

A separate survey conducted earlier this year by BlackRock found that on average, Gen Zers have an expected retirement age of 63.6 years — nearly two years younger than the boomer average of 65.9 years. More than one-third of Gen Z respondents in that survey said they would need less than $250,000 to retire comfortably. In contrast, nearly half of boomers said they would need $1 million to $3 million.

The TCRS survey found similar differences between generations. For example, while the vast majority of Gen Z respondents doubt that they will be able to depend on Social Security in retirement, 40% of boomers expect Social Security to be their primary source of retirement income.

Gen X workers have the least faith in Social Security, with 78% saying they are concerned that Social Security will not be there for them when they are ready to retire. Among millennials, 73% said they are concerned that Social Security will not be there when they are ready to retire — the same percentage as Gen Z respondents.

One way to address the problem is for policymakers to develop strategies to strengthen the retirement system, Collinson said. But the private sector will likely play the biggest role.

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“The private sector must continue innovating products, services, and solutions that can help people live, work, save, and retire better. We’re all in this together,” Collinson said.

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