4 Reasons Why Gen Z and Millennials Are Overconfident About Retirement
Retirement might seem in the distant future to millennials and Gen Z, but the moves you make today determine the resources you'll have tomorrow. If you’re in these age groups, you might not be looking too closely at the number in your retirement account, figuring you’ll have a long time to save.
On the flip side, those currently nearing or at retirement age are not feeling secure in what they’ve saved. According to a survey done on adults 50-plus by Western & Southern Financial Group, many haven’t saved enough to fully stop working during retirement.
Here’s what the survey revealed and how millennials and Gen Z can learn from the older generations.
33% of Retirees Have To Work
According to the survey, 45% of retired Americans are currently working in paying jobs, while 19% are open to returning to work. The survey also revealed that 33% of those who are returning to work must do so in order to make ends meet. If you’re looking to completely stop working during retirement, you need to make sure you’re on target to hit your financial goals.
39% Wished They Had Started Saving Earlier
If you haven’t started saving for retirement or haven’t saved very much, it’s time to start. According to the survey, 39% wish they had started saving earlier, with another 39% regretting how inconsistently they had saved.
If you currently have debt, prioritize paying that off first, then start saving for retirement. Fidelity recommends saving 15% of your pre-tax income every year. This might be done through a 401(k) or a personal IRA account. Either way, you’ll be in pretty good shape come retirement.
$500K Is the Magic Number
According to the survey, the number that would make most feel financially secure in retirement is $500,000. That amount might seem daunting now, but it’s not impossible. Talk to your financial advisor about formulating a plan that will get you to that amount by the time you wish to retire. You can start by cutting back on daily spending, picking up a side gig or selling valuables.
55% Say Uncertainty About Social Security Has Influenced Their Financial Outlook
According to a 2025 report from the Social Security Trustees, Social Security funds will be depleted by 2032 if Congress takes no action to amend this. Anyone looking to receive Social Security after that year has reason to be worried. This report gives even more reason to start saving for retirement now and save more than you had originally intended. Your future will thank you.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.