Generation Gaps Among Americans in Retirement Planning

Takeaways

• Retirement planning confidence varies significantly across generations, influenced by economic factors and unique challenges.
• Current retirees advise paying down debt, beginning to save early, and utilizing employer-sponsored plans for successful retirement.
• Adapting to changing financial realities and seeking professional advice from financial planners and estate planning attorneys is crucial for ensuring retirement stability

Planning for retirement can be like trying to hit a moving target that is sometimes invisible. It can be difficult to know how much to set aside and which savings and investment tools to use. Add to this the ever-changing investment landscape and not knowing what expenses will come along after retirement, especially regarding health care and long-term care, and these factors make retirement planning challenging for Americans.

Financial concerns and preparation strategies vary among different generations of Americans. From baby boomers entering retirement to Gen Zers just beginning their careers, members of each generation face unique obstacles and approaches while planning for their retirement years.

Since 2019, Fidelity Investments has conducted a study examining how people view and plan for retirement. Fidelity’s 2025 study reviewed four generations of Americans: baby boomers, Generation X, millennials, and Generation Z.

The findings reveal varying levels of confidence and preparedness across age groups, influenced by economic factors and unique generational challenges. Overall, 67 percent of Americans surveyed expressed confidence in their retirement prospects. However, this is down 7 percentage points from 2024. This year’s study also addressed retirees, most of whom are baby boomers, and how retirement is going for them.

Baby Boomers: The Reality of Retirement

Many baby boomers (born 1946-1964) are either retired or nearing retirement. The study reveals that over 70 percent of recent retirees feel their retirement is proceeding as planned. Nonetheless, many have been surprised by recent stock market declines and rising costs, particularly in health care. Sixty-eight percent are confident in their retirement plans.

The top three sources of retirement income for current retirees include Social Security (77 percent), pensions (48 percent), and personal savings (41 percent). Though many benefited from employer-sponsored pensions earlier in their careers, the shift to 401(k) plans and personal savings has left some struggling to maintain their desired lifestyle.

Amid market downturns, rising health care costs, and increased life expectancy, some boomers are waiting until full retirement age to collect Social Security or else seeking part-time work to supplement their income.

Generation X: The “Sandwich Generation” Struggles

Gen X (born 1965-1980) exhibits the lowest confidence, with only 53 percent feeling assured about retiring on their own terms. This group faces unique challenges, such as juggling mortgages, children’s education expenses, and caring for aging parents, which hinder their ability to save adequately for retirement. Many are behind on savings due to economic downturns, student loan debt, and high living costs. At 45 percent, Gen Xers said that saving enough money for retirement is their biggest challenge, the highest percentage among the four generations surveyed.

Many Gen Xers, afraid they won’t have enough saved by retirement, may be able to prepare by increasing their 401(k) plan and individual retirement account contributions or investing in real estate or other assets to create additional income streams.

Millennials: Debt and Uncertain Futures

Millennials (born 1981-1996) show a 71 percent confidence level in their retirement planning even though they face significant hurdles with student loan debt, high housing costs, and job market instability delaying their ability to save. Many also entered the workforce during the Great Recession, affecting their earnings and savings potential early on.

Influenced by the pandemic’s effects on work-life balance, this generation is actively seeking nontraditional retirement paths, with 73 percent indicating a desire to focus on personal passions and dreams.

Many millennials work in unconventional roles without access to employer-sponsored retirement plans. Those who can’t take advantage of these options are seeking to invest in the stock market or cryptocurrency.

Generation Z: A Cautious Yet Optimistic Start

Gen Z (born 1997-2012) is just entering the workforce, but they have already witnessed economic downturns, high inflation, and discussions about Social Security’s longevity. As a result, they are more financially cautious than previous generations at their age. Seventy-five percent express confidence in their ability to retire on their own terms. This optimism is likely a result of many being in the early stages of their careers.

Amid rising inflation and housing costs that may hinder their savings efforts, Gen Zers can benefit from prioritizing financial literacy to make informed investment and savings decisions.

Lessons From Today’s Retirees

Even though sources of retirement income will be different for the next generation of retirees, today’s retirees can offer helpful advice to those succeeding them. Here are some tips for individuals who are beginning to plan for, or are approaching, retirement:

• Pay down debt. Forty-two percent of retirees recommend paying down high-interest debt before focusing on retirement savings.
• Begin saving early. Two-in-three retirees suggest saving for retirement as early as possible, even if it is in small amounts at first.
• Contribute to retirement plans. Over half (58 percent) of retirees encourage younger investors to take advantage of employer-sponsored retirement plans, such as 401(k)s and 403(b)s.
• Learn more about retirement benefits. Forty-one percent suggest learning about the uses and limits of retirement benefits, such as Social Security and Medicare.
• Consult a financial advisor. Over a third (37 percent) recommend consulting a financial advisor to create a successful plan.

Preparing for Retirement

As economic landscapes continue to change, retirement readiness remains a moving target. Regardless of generational differences, prioritizing long-term financial planning and adapting to changing financial realities will be essential for ensuring a stable and fulfilling retirement.

Plan for the best possible retirement by working with a qualified financial planner and an experienced estate planning attorney in your area.

For additional reading about estate and retirement planning, check out the following articles:

• What Is Estate Planning?
• Claiming Social Security Retirement Benefits at Age 70
• Do I Need to Pay Income Taxes on My Social Security Benefits?
• Why Should I Work With an Estate Planning Attorney?
• Choosing Who Will Inherit Your Retirement Accounts Requires Some Thought