A new Vanguard analysis shows that younger workers are getting an unexpected boost in retirement preparation, even as millions of baby boomers face widening savings gaps.
Generation Z is surpassing baby boomers in retirement readiness, says Vanguard
Vanguard’s 2025 Retirement Outlook shows that Generation Z and Millennials are surpassing older generations in their retirement preparation. reported Forefront.
Nearly half of Gen Z workers and 42% of millennials are on track to maintain their standard of living, compared to 40% of baby boomers nearing retirement.
“Younger workers benefit from better plan design features such as auto-enrollment, automatic escalation of savings interest over time and investments in qualified standard investment alternatives, but managing debt remains essential,” said Nicky Zhang, Vanguard investment strategist and co-author of the study.
Access to DC subscription almost doubles the success rate of pensions
The report shows that workers with access to defined contribution plans are almost twice as likely to retire: 54% compared to 28% without access.
Vanguard estimates that six in 10 Americans would be on the right track if every employee had a plan.
Baby boomers face the toughest terrain. The average boomer is expected to be short $9,000 annually, about a quarter of expected expenses.
Co-author Fu Tan said modest changes can help: “For many, the path to greater retirement security does not involve dramatic sacrifices. It can be achieved by making smart use of pension plans and savings instruments, by considering part-time work, or by simply taking a little more time before retirement.”
See also: Ronald Reagan ‘didn’t like tariffs,’ says economist Paul Krugman: he repeatedly emphasized ‘the virtues of free trade’
Smart retirement moves for a $500,000 portfolio
Financial personality Vincent Chan said retirees could earn $500,000 portfolio work by keeping costs lowwith a withdrawal rate of 4.7% and relying on long-term growth.
He assumed a 9% annual return and noted that the portfolio could still grow if retirees avoided panic selling and lived modestly.
Chan also recommended taking withdrawals from traditional accounts up to the standard deduction, so married couples could keep $23,500 a year tax-free while Roth IRAs could continue to grow.
Previously a pension expert Brandon Buckingham warned that failing to update IRA beneficiary forms was one of the costliest mistakes investors have made, with some leaving outdated or missing names despite forms overriding a will.
With 57.9 million U.S. households owning IRAs by mid-2024, he said, keeping beneficiary status current has become increasingly important.
Read next:
Disclaimer: This content was produced in part using AI tools and was reviewed and published by Benzinga’s editorial staff.
Photo courtesy: Shutterstock/mayam_studio
#Generation #advances #Vanguard #warns #baby #boomers #face #annual #retirement #shortfall #Americas #savings #gap