A new Vanguard analysis shows younger workers gaining unexpected momentum on retirement preparedness even as millions of baby boomers confront widening savings gaps.
Gen Z Tops Boomers In Retirement Readiness, Vanguard Says
Vanguard's 2025 Retirement Outlook shows Gen Z and millennials outpacing older generations on retirement readiness, reported Vanguard.
Nearly half of Gen Z workers and 42% of millennials are on track to maintain their standard of living, compared with 40% of baby boomers nearing retirement.
"Younger workers are benefiting from better plan design features like autoenrollment, automatic escalation of saving rates over time, and investment in qualified default investment alternatives, but managing debt remains essential," said Nicky Zhang, a Vanguard investment strategist and co-author of the research.
DC Plan Access Nearly Doubles Retirement Success Rates
The report finds workers with access to defined contribution plans are nearly twice as likely to be on track for retirement—54% versus 28% without access.
Vanguard estimates six in 10 Americans would be on track if every worker had a plan.
Baby boomers face the toughest terrain. The median boomer is projected to fall $9,000 short annually, about a quarter of expected expenses.
Co-author Fu Tan said modest changes can help: "For many, the path to greater retirement security isn't about dramatic sacrifices. It can be achieved by making smart use of retirement plans and savings vehicles, considering part-time work, or simply allowing a bit more time before retiring."
Smart Retirement Moves For A $500,000 Portfolio
Financial personality Vincent Chan said retirees could make a $500,000 portfolio work by keeping expenses low, using a 4.7% withdrawal rate and relying on long-term growth.
He assumed a 9% annual return and noted 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 allowing Roth IRAs to continue growing.
Earlier, retirement expert Brandon Buckingham warned that failing to update IRA beneficiary forms was one of the most costly mistakes investors made, with some leaving outdated or missing names despite forms overriding a will.
With 57.9 million U.S. households holding IRAs as of mid-2024, he said keeping beneficiary designations current had become increasingly critical.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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