Retirement Preparedness: How Different Generations Save and What It Means for Your Future

Core Insights - Less than half (42%) of Americans are on track for retirement, with baby boomers being the least prepared at only 40% [1][4][10] - Gen Z shows the highest preparedness at 47%, followed by millennials (42%) and Gen X (41%) [1][4][10] Retirement Preparedness by Generation - Gen Z: Median income of $27,000, 47% on track for retirement, with an annual shortfall of $3,000 [2] - Millennials: Median income of $49,000, 42% on track for retirement, with an annual shortfall of $4,000 [2] - Gen X: Median income of $59,000, 41% on track for retirement, with an annual shortfall of $6,000 [2] - Baby Boomers: Median income of $56,000, 40% on track for retirement, with an annual shortfall of $9,000 [2][5] Factors Affecting Retirement Readiness - Baby boomers are less equipped for retirement due to limited access to modern defined contribution (DC) plans during their prime earning years [6][10] - Key features of DC plans, such as auto-enrollment and auto-escalation, became common only after the Pension Protection Act of 2006, which many boomers missed [7] - The decline of defined benefit (DB) plans has also contributed to the lower preparedness of older generations compared to younger ones [8] Challenges for Baby Boomers - The time constraint for baby boomers to save for retirement is critical, as they have fewer working years left to recover from under-saving [9][10]