Gen X, Y Start Retirement Savings 10 Years Earlier than Parents
Younger Generation Z Counting on
Nearly 60 percent of Gen X (59%) and Gen Y (56%) make regular, automatic contributions toward their retirement savings2,compared to 46 percent of non-retired Baby Boomers2.And 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-twenties2. That’s nearly a decade earlier than Baby Boomers who, on average, stared saving at age 352.
“For even the most sophisticated investor, retirement planning can be a tough concept to grasp,” said
For the teens and young adults of Generation Z (ages 13-22) who have grown up in households that struggled through the recession, the question remains as to whether they have been tainted by the gloom and doom or driven to be better. According to the survey, Gen Z generally understands the importance of saving money – over half (56%) said they have a savings account – thanks to the influence of early conversations about money with their parents1. But, those conversations have largely been about saving in general (82%) or saving for college (67%), rather than preparing for retirement (38%)1. Just eight percent of Gen Z reported they are currently saving money for their “golden years”1.
In fact, many Gen Z savers have a very different outlook on retirement saving strategies and timing when compared to their parents:
- Just 35 percent of Gen Z respondents believe they will not be able to count on
Social Security when they retire, and therefore should save money for themselves, compared to 61 percent of Parents who reported the same1. - Nearly 40 percent (39%) percent of Gen Z respondents believe they will have an inheritance, and therefore don't need to worry about saving for retirement, compared to just 16 percent of Parents who reported that they believed the same for their Gen Z children1.
- Forty-three percent of Gen Z respondents believe that you can never start saving too early for retirement, compared to 71 percent of Parents who reported the same1.
“The good news is that Gen Z is starting off with a good understanding of the importance of saving,” said Braxdale. “But that doesn’t mean they should wait to become more educated on proper long-term savings habits. We encourage parents to talk to kids specifically about retirement savings to ensure they understand the importance of getting a head start and taking advantage of the power of compounding.”
TD Ameritrade's website offers a number of free retirement planning resources that can help investors explore many of these questions — and more — including:
1. A "Cost of Waiting" Calculator that can help you understand why starting to save earlier is better in the long run
2. WealthRuler™ retirement calculator that can help you estimate your retirement readiness
3. Access to a network of knowledgeable, independent registered investment advisors (RIAs) through the TD Ameritrade AdvisorDirectTM program.
For more information on the surveys, including key findings, visit TD Ameritrade’s online newsroom or follow the Company on Twitter, @TDAmeritradePR.
Under no circumstances should participation by a certain RIA in AdvisorDirectTM be considered an endorsement or recommendation by
Potential AdvisorDirect clients should typically have at least
AMTD-G
1Survey Methodology-Gen Z
2,001 U.S residents participated in an online survey from
2Survey Methodology-Retirement Reformation
An online survey was conducted with N = 2029 U.S. residents from
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Copyright: | Copyright Business Wire 2012 |
Source: | Business Wire, Inc. |
Wordcount: | 1464 |
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