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More than half of Millennials and Gen Z believe the future will be even more difficult, according to a new report from Fidelity Investments. retirement savings Because the cost of living increases.
According to Fidelity’s 2024 Retirement Planning Survey, 57% of Millennials and 56% of Gen Z believe rising costs of living will make it harder to save for retirement than their parents, compared with 38%. Remarkably high. Her 16% of Gen Xers and baby boomers expressed concern.
Respondents from across generations were cited. Increased costs due to inflation, consumer debt and the need for emergency savings are major barriers to achieving retirement savings goals. But younger generations cited additional challenges, such as dealing with student loan debt, saving for a home or wedding, and childcare costs.
Given these challenges, Americans of all generations say they wish they had started planning for retirement earlier. The survey found that while Gen Z respondents, on average, started their retirement planning at age 20 but wished they had started at age 17, Millennials started their retirement planning at age 27. said they wished they had started at age 22.
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More than half of Millennial and Gen Z workers say they think it will be more difficult than their parents to save for retirement due to the cost of living. (Photo by Paola Chapdelaine for The Washington Post via Getty Images/Getty Images)
Retirement savers point to recent legislative changes like the enactment of the SECURE 2.0 Act that have made it easier to save.
This law allows employers to contribute to: worker retirement account An emergency savings account of up to $2,500 has also been established for employees who are not making a high salary while paying down student loan debt, to which employees and employers can contribute up to a maximum limit.
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Fidelity Investments found that Americans of all generations wish they had started saving for retirement sooner. (Photo courtesy of AaronP/Bauer-Griffin/GC Images/Getty Images)
One-third of Gen Z respondents said they believe their employers could take advantage of the new law to increase their savings by matching retirement contributions with student loan payments. Furthermore, one-third Gen Z and Millennials He said it can also help you grow your retirement savings while building up your emergency savings.
The overwhelming majority of respondents (85% of all four generations surveyed), with an average retirement age of 61 to 62, said they wanted to retire while still healthy enough to be active.
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Gen Z and Millennial workers cite challenges such as high living costs, student loan debt, and saving for a home or emergency savings as barriers to saving for retirement. (Photo by Nicolaus Czarnecki/MediaNews Group/Boston Herald via Getty Images / Getty Images)
However, the factors motivating retirement vary by generation, with Gen Z and Millennials saying being debt-free or achieving career goals are the biggest factors, while Boomers are more emotionally motivated. He said he would resign when he felt “ready” to do so.
One in 10 Gen X respondents continue to save with Fidelity but have not decided when they plan to retire. Recommended savings rate You will be paid 15% of your income, but this figure includes employer and employee contributions. Younger generations save an even larger percentage of their income, with Millennials saving 20% and Gen Z saving 25%.
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“Americans are entering their ‘golden years’ with more intention and opportunity than ever before,” said Rita Assaf, vice president of retirement products at Fidelity Investments. “As more people think about retirement with new goals, such as living abroad or starting a business, it is important to consider the potential impact on Social Security, Medicare and taxes.”
