Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.
Youngest Generation Needs Retirement Savings Lessons
According to new survey findingsreleased by TD Ameritrade, nearly 60% of Gen X (59%) and Gen Y (56%) make regular, automatic contributions to their retirement savings, compared with 46% of non-retired Baby Boomers. When it comes to getting a jump on their nest egg, younger generations are eager to get started—both Gen X and Gen Y started saving for retirement, on average, in their mid-to late-twenties—nearly a decade earlier than Baby Boomers who, on average, started saving at age 35.
However, teens and young adults of what TD Ameritrade calls Generation Z (ages 13 to 22) seem misguided about retirement planning.
According to a second survey, Gen Z generally understands the importance of saving money—more than half (56%) said they have a savings account—thanks to the influence of early conversations about money with their parents. But those conversations have largely been about saving in general (82%) or saving for college (67%), rather than preparing for retirement (38%). Just 8% of Gen Z reported they are currently saving money for their “golden years.”
In addition, only 35% of Gen Z respondents said they believe they will not be able to count on Social Security when they retire and therefore should save money for themselves, compared with 61% of parents who reported the same. Thirty-nine percent of Gen Z respondents believe they will have an inheritance and therefore do not need to worry about saving for retirement, compared with just 16% of parents who reported they believe the same for their Gen Z children.
Forty-three percent of Gen Z respondents say you can never start saving too early for retirement, compared with 71% of Gen Z parents.
For the Gen Z survey, 2,001 U.S residents participated in an online survey from April 27 to May 1, 2012, by Head Research. Gen X and Gen Y data was based on an online survey with 2029 U.S. residents from March 27 to 28, 2012, by Head Research.