Gen Z Most Optimistic About Their Retirement Outlook

Different generations have differing perspectives on their retirement prospects.? Generation Z seems to be the most optimistic.? A pair of recent BenefitsPro articles highlighted two recent surveys that examined how Americans of all generations are feeling about their retirement readiness.?

This BenefitsPro article featured the results of a recent Yougov survey, which found that people who are able to retire before age 55 tend to take greater risks in the stock market and follow a consistent budget.? However, most Americans must wait until at least age 65 to retire, according to the survey, and less than half of respondents believe they’ll be able to do so.? A “significant percentage” of those surveyed reported that they’re unsure when they’d like to retire and when they’ll be able to.?

Gen Z has the most retirement confidence .? They are the most likely to want to retire before age 65, and the most likely to believe they’ll be able to, with 49% of Gen Z saying they think they’ll be able to reach this goal, according to the Yougov survey.? By contrast, only 30% of millennials and 31% of Gen Xers believe they will be able to retire before age 65.?

Some other highlights from the survey include:?

• 40% of Americans lack confidence in their financial security heading into retirement, especially Gen X, millennials, and women?

• 30% with confidence in their finances were more likely to work with a financial advisor and own savings and investing products?

• 62% are counting on Social Security to fund their retirement?

• 36% say they’ll rely on personal savings?

• 35% report they have no retirement savings at all?

Another BenefitsPro article spotlighted a recent Goldman Sachs Asset Management report, which revealed that younger generations – Gen Z and millennials – demonstrating confidence that they are getting their retirement savings on track, while Gen X and boomers often reported falling behind on their savings and struggling to catch up before retirement.?

According to Goldman Sachs, the survey results show that plan sponsors have made headway with younger generations, boosting savings rates through the use of automated retirement plan design features such as automatic enrollment, auto escalation, and default professional asset allocation strategies.? According to the survey, as cited in BenefitsPro, “For instance, 67% of millennials and 60% of Gen Z have a personalized plan for retirement, and 69% of millennials and 68% of Gen Z report that their savings is on-track or ahead of schedule.”?

Such was not the case for older generations.? Plan sponsors may have been too slow to adopt plan design features to help Gen X and boomers, 45% of whom report their savings are behind schedule. ?

Among Gen Z, 44% expect to retire before age 60 – a presumption that Goldman Sachs noted is “aggressive,” given that 75% plan to retire with less than 70% of their working income, and 61% expect to fund less than 50% of their retirement with personal savings vs. Social Security or pensions.??

Plan design features have helped increase savings rates for younger generations, while older generations are challenged to save enough for retirement, which is more imminent for many Gen X and boomer workers.? According to Chris Ceder, senior retirement strategist at Goldman Sachs Asset Management, in a press release cited in BenefitsPro: “When plan sponsors and advisors design the next wave of solutions to meet the evolving needs of employees, it is important that they consider how emergency savings, financial education, personalized planning technology/managed accounts, and guaranteed income fit in.”?