Why are Gen Z saving more for retirement than Millennials and Boomers?

With inflation and the prospect of recession on everyone’s mind, many people are eager to protect their personal finances, especially retirement accounts.

It turns out that Generation Z workers are taking those retirement savings especially seriously—even more so than older generations, which include Millennials, Gen Xers, and Baby Boomers, per new research. black RockAnd there are potentially many contributing factors.

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According to nerdwalletExperts generally suggest that employees save between 10% and 15% of their pre-tax income for retirement; Higher earners should aim for the top of that range, while lower earners, who can rely on Social Security to replace much of their income, typically save less.

BlackRock’s study found that Gen Z workers (ages 18-25) are saving near the upper half of that range, on average – at 14% – while Millennials (ages 26-42), Gen Xers (ages 43) -55), and baby boomers (ages 56-75) save an average of 12%.

Additionally, BlackRock’s research showed that the overall share of Americans who believe they are on the right track for retirement has fallen from 68% in 2021 to 63%, with plan sponsors also losing faith: 58%. believe their employees are on the right track, compared to 63% last year.

Anne Ackerley, head of BlackRock’s retirement group CNBC Gen Z may be more cautious because they were more likely to grow up in a household where no one relied on a traditional pension, giving the “you’re on your own” message, and because they supported family members during conflict. Would have seen 2007-2009 recession.

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Additionally, researcher Jason Dorsey pointed out yahoo finance Gen Z workers were most likely to lose their jobs during the pandemic, “which further changed the way they work, how they view savings, retirement, etc. The fragility of employment became very, very real to them.” “

If Gen Z workers stay on track, they may actually retire one day, Dorsey says, although the same may not be said for many millennials.