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Gen Z Is More Confident About Retirement Than Boomers, Except When It Comes to One Thing Some experts are skeptical of their optimism.

By Madeline Garfinkle

Opinions expressed by Entrepreneur contributors are their own.

zimmytws | Shutterstock

Retirement is an increasingly stressful topic for millions of Americans as inflation sweeps the nation and the fate of Social Security remains in flux. According to a Gallup survey released in May, not having enough money for retirement was reported as the "most troubling" financial risk for Americans.

However, there is one age group that is remarkably more optimistic about retirement than the rest of the nation: Gen Z.

According to Northwest Mutual's Planning & Progress Study for 2023, about 65% of Gen Z-ers "expect to be financially prepared for retirement" — which is much higher than millennials (54%), Boomers (52%), and Gen X (45%).

When asked about how much is likely needed to retire when the time comes, Gen Z reported an average of $1.2 million. How much an average American needs to retire comfortably varies based on lifestyle, according to the widely accepted 4% rule (which suggests you can withdraw 4% of retirement savings annually for about 30 years), so $1.2 million would mean retirees could spend about $50,000 a year.

Gen Z also said they'd be retired age of 60. Forty percent expect to live until 100.

"I think those are bold and fantastic goals – which means that they will have to be intentional about planning to live four decades of worry-free life in retirement," Javeri Gokhale, chief strategy officer, president of retail investments and head of institutional investments at Northwestern Mutual, said in the report.

Related: More Americans Are Retiring Abroad, Without a Massive Nest Egg — Here's How They Made the Leap

The level of confidence could be attributed to the current distance from retirement the generation may feel. Still, some experts are skeptical of the optimism.

"Yes, you can survive on $1.2 million, but what sort of lifestyle are you willing to agree to? Not a comfortable one," Kashif Ahmed, president at American Private Wealth, told Yahoo Finance. "It is possible, but is the 20-something willing to put in the sacrifices today to ensure that such a lengthy retirement will be possible? I am pessimistic," he added.

Asim Hafeez, an entrepreneur who achieved financial independence in his 20s, added that Gen Z's $1.2 million retirement expectation likely neglects to factor in costs that increase with age, like medical bills.

"It seems wildly miscalculated," Hafeez told the outlet. "You're at an older age, you're probably going to have more expensive medical expenses because your body breaks down a bit. You may need some extra care at some point."

However, there is one element of retirement that Gen Z was vastly more pessimistic about than older generations: Social Security. Gen Z-ers said they expect only 15% of Social Security to fund their overall retirement — four percentage points less than millennials (19%), almost half of Gen X (27%), and far lower than Boomers (38%).

Related: Retirees Are Earning Up to $20,000 Per Month With One Fully Remote Side Hustle

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

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