Story at a glance
- A new survey from the financial firm Principal found that “super savers” — those who put 15 percent or more of their income toward retirement savings — aim to retire around age 57.
- The survey showed that the generation born in the mid to late 90’s expects to achieve this goal by sticking to the basics.
- Around 39 percent are aiming to save $3 million before retiring.
Gen Z Americans who put a good chunk of their incomes toward retirement plan to end their careers ahead of the traditional retirement age.
A new survey from the financial firm Principal found that these “super savers” — those who put 15 percent or more of their income toward retirement savings — aim to retire around age 57.
The survey showed that the generation born in the mid to late 90s expects to achieve this goal by sticking to the basics and many plan to save more than $1 million before retirement. Around 39 percent are aiming for $3 million.
Only about a quarter of Gen Z super savers are counting on Social Security as retirement income.
Super savers in each generation surveyed said they are sticking with their savings plan despite inflation, although around a third listed it among their top concerns. More than 80 percent of respondents said they “are in good shape to endure a recession.”
“From continuing to save through an inflationary period to establishing long-term financial goals, Super Savers embody some of the best practices for retirement saving that gives them the mental and emotional strength to stick with their plans even during times of market uncertainty,” Sri Reddy, senior vice president, Retirement & Income Solutions at Principal, said in a media release.
“Their savings habits go to show you can tuck away for the long-term while living in the moment today,” Reddy added.
Still, younger savers are putting off major purchases and delaying homeownership given market conditions. Around 18 percent of Gen Z survey respondents said they were homeowners, while more than two-thirds said home prices were too high.
Despite a cooler housing market, 30-year fixed mortgage rates rose above 6 percent – the highest rate since the 2008 housing crisis.
Principal conducted its online survey of 1,120 retirement plan participants, 9 percent of whom are members of Gen Z, from June 24 to July 5.
An earlier survey from the investment management company BlackRock found that more than two-thirds of Gen Z workers believe they are saving adequately for retirement. But a third of respondents said they think $250,000 would be sufficient to retire.