Yahoo Finance

Millennials and members of Gen Z are prioritizing retirement by starting the savings process early and saving more than previous generations.

See: Prepare for Retirement by Living on Less and Taking the 80% Challenge
Find: 3 Ways To Recession-Proof Your Retirement

Meanwhile, Gen X could be falling behind benchmarks with lower contributions and a lack of financial planning.

The Kids Are Alright

According to a 2021 survey from the TransAmerica Center, millennials contributed a median of 15% of their annual pay to 401(k) or other retirement accounts, and most of them began saving five years earlier than their Gen X counterparts by beginning at age 25. That’s enabled millennials to amass a median retirement savings of $50,000.

Gen Zers are even more zealous about saving for retirement by stashing a median of 20% of their annual pay into retirement accounts. They’ve even started saving at a shocking median age of 19, which has helped them accumulate a median of $33,000 in their retirement savings already.

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Why are they saving so much? It’s likely because of a concern with a lack of a social safety net. A full 73% of millennials in the survey cited concern with relying on a weakened Social Security system that could dissolve before they reach retirement age.

Also: 7 Surprisingly Affordable Places To Retire in Europe

How Much You Should Be Saving

Younger generations have the right idea by saving early and reserving a significant portion of their income. Experts suggest saving at least 15% of your income for retirement. Plus, estimations for how much you’d need to retire comfortably have reached the millions. A 2022 survey from Charles Schwab found workers estimated needing $1.7 million in retirement savings.

The amount you truly would need to have saved for retirement is based on factors including age, income, and marital status. Experts at T. Rowe Price suggested retirement savings benchmarks for the following ages:

For example, a 35-year-old making $125,000 annually should have 1 to 1.5 times their salary saved, which totals $125,000 to $187,500. For older workers, this figure increases substantially. A 55-year-old making $125,000 should have up to eight times their salary saved up — which amounts to $1 million. Referring back to the TransAmerica Center Study, Gen X’s retirement contributions might not match those benchmarks.