By Ben Geier, CEPF

A 2021 survey from TransAmerica says that the youngest generation of American adults is getting a jumpstart on retirement by saving a lot earlier than older generations. Financial experts will point out that this is in part due to the decline of pensions and the rise of defined contribution plans like 401(k)s, which allow employees to invest part of their paycheck into a tax-advantaged retirement account. In fact, Gen Z could be the first generation to save entirely for retirement through a defined contribution plan.

When Does Each Generation Start Saving for Retirement?

There are four major generations of Americans currently active in the workforce: Baby Boomers (born between 1946 and 1964), Generation X-ers (born between 1965 and 1980), Millennials (born between 1981 and 1996) and Generation Z-ers (born between 1997 and 2012).

While the younger generations are generally thought to have been handed a raw deal when it comes to the state of the economy — wages have remained stagnant but prices, especially of homes, continue to soar — all of these age groups have prioritized the need to save for retirement.

The TransAmerica survey shows that Generation Z-ers started saving for retirement at the median age of 19, while Millennials began at 25, Generation X-ers began at 30 and Baby Boomers started putting away money for retirement at almost twice the age of Gen Z — 35.

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