\n
![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2024\/04\/GettyImages-1251263908-e1711997099205.jpg?w=2048\")
<\/p>\n [ad_1]
\n<\/p>\n
In fact, the average Gen Zer started putting money away for retirement at age 22, according to Northwestern Mutual\u2019s 2024 Planning and Progress Study<\/a>. That\u2019s 15 years earlier than the average baby boomer, who said they started saving at 37. For the average Gen Xer and millennial, those ages were 31 and 27, respectively, per the study, which surveyed over 4,500 U.S. adults in January on a variety of money and financial decision-making behaviors.<\/p>\n The survey, published since 2012, also found that thanks to inflation, Americans believe they\u2019ll need increasingly more money to live comfortably in retirement. This year, respondents said they\u2019d need $1.46 million, on average, to retire comfortably, compared with $1.27 million last year. In 2020, that figure was $950,000.<\/p>\n Other recent data has pointed to younger generations getting an earlier jump on saving for retirement. Last year, a report<\/a>\u00a0by\u00a0Vanguard<\/a>\u00a0found workers age 18 to 24 in 2021 were 32% more likely to invest in their workplace retirement plan than their older colleagues were at their age, thanks to the increased prevalence of automatic enrollment<\/a> and easier access to information on plans and the benefits of contributing to them earlier. A recent Fidelity report<\/a> found some Gen Zers starting to plan at age 20.<\/p>\n Kyle Wick, private wealth advisor at 22 One Advisors,\u00a0a Northwestern Mutual<\/a> Private Client Group, says another component of Gen Zers saving earlier is that retirement itself has profoundly changed over the past couple of generations. Retirement didn\u2019t really exist as Americans think about it today for boomers\u2019 parents or grandparents<\/a>; those earlier generations benefitted from pensions in addition to Social Security and private savings.<\/p>\n Gen X is the first generation that\u2019s primarily had to rely on private savings when it comes to retirement, with each subsequent generation getting a bit more of a head start.<\/p>\n \u201cI don\u2019t think older generations were as worried about tomorrow as people are today,\u201d Wick tells Fortune<\/em>, noting that people simply weren\u2019t living as long, and if they were, the expectation was to keep working. \u201cYoung people now are envisioning, \u2018I want to retire at 60 and live until 100.\u2019 They\u2019re smart\u2014they know they have to get started if they really want that.\u201d<\/p>\n Still, financial experts say it may not be enough\u2014especially if the sum required to retire comfortably keeps creeping up. While the average member of Gen Z said they\u2019ll need $1.63 million to retire comfortably, according to Northwestern Mutual, some advisors say the real number<\/a> eventually could exceed $2 million. Even more striking: Northwestern Mutual\u2019s survey finds 32% of respondents of all ages haven\u2019t started saving at all.<\/p>\n But Gen Z seems to have learned some lessons<\/a> from ongoing coverage of America\u2019s retirement crisis. Baby boomers and Gen X are wildly underprepared for retirement<\/a> on the whole, according to many surveys and studies. The typical Gen X household has $40,000 in private retirement savings<\/a>, while the median retirement account balance<\/a> for those 65 to 74 is around $200,000.<\/p>\n Baby boomers and Gen Xers, on average, said they\u2019re expecting to work longer than younger generations, with boomers saying they\u2019ll likely retire around age 72 and Gen Xers saying 67. Meanwhile, millennials expect to retire around 64 while the average Gen Zer says, perhaps a tad too optimistically, 60<\/a>.<\/p>\n The good news is, as the Vanguard<\/a> report shows, employees of every generation are saving a lot more than they used to. Savers were deferring an average of 7.7% of their paychecks into their 401(k)s in 2021, compared with 7.2% in 2006.<\/p>\n The survey results are even more impressive when taking into consideration the economic headwinds facing Gen Zers. From out-of-control housing prices to the ongoing issue of student loan debt<\/a> to ever-growing childcare costs, young workers are facing financial hurdles older generations either didn\u2019t have to overcome or did but to a lesser degree.<\/p>\n \u201cGeneration Z are starting their careers in a very difficult financial time,\u201d Clark D. Randall, a Texas-based certified financial planner and director of financial planning at\u00a0Creekmur Wealth Advisors<\/a>, previously told Fortune<\/em><\/a>. \u201cThey\u2019re facing unprecedented inflation and a housing market with tight supply and high interest rates. They hear about the problems with the Social Security trust fund.\u201d<\/p>\n Despite those challenges, younger Americans are still making significant progress. Members of the millennial and Gen Z generations may hold less wealth than older generations did at their age, particularly boomers, but over the last few years, their wealth has grown the fastest of any age group\u2014largely due to their stock and mutual fund holdings\u2014according to the New York Federal Reserve<\/a>.<\/p>\n<\/div>\n\u2018They know they have to get started\u2019<\/h2>\n
Gen Z faces \u2018unprecedented\u2019 headwinds<\/h2>\n
Learn how to take control of your personal finances with Get Your Due, our six-week email bootcamp. Sign up<\/a> for free.<\/div>\n