How 4 different generations approach retirement — and where they’re failing

Published March 5, 2024 10:12 AM EST 2 Min Read

Man typing into a calculator while holding bills and stacking coins — Adobe Stock

The difference between generations is often measured in music, manners and technology. But it can also be measured in retirement savings.

For years, studies have shown that baby boomers, Generation X, millennials and Generation Z are moving at very different speeds in the race to a secure retirement. Gen Zers, born well into the age of the 401(k), have had a leg up on their predecessors thanks to auto-enrollment and other default features in their retirement plans. To a lesser extent, the same has been true of millennials.

In 2021, 62% of Gen Z workers — defined as those aged 18 to 24 — participated in a workplace retirement plan, according to Vanguard. That’s more than twice the rate of the same age group in 2006, when only 30% participated.

What could explain this jump? In Vanguard’s view, the clear answer is auto-enrollment. This feature, which defaults workers into enrolling in their retirement plans and then gives them the option to unenroll, has been found to dramatically increase participation. According to one previous Vanguard study, this default more than tripled the number of new hires who signed up for their plans — from 28% to 91%.

Nathan Place

National Reporter

Nathan Place is a national reporter at American Banker. A native of New York City, he has worked for more than a decade in both print and video journalism. He got his start in Beijing, where he … Read full bio

For reprint and licensing requests for this article, click here.

More From Employee Benefit News

Employee benefits

Most Americans fear a retirement crisis. How employers can help

U.S. workers say retirement is getting harder to afford, raising questions about how organizations can help workers save, understand their benefits, and plan ahead.