Generation Gaps in Retirement Planning: How Different Age Groups Approach Their Future

Planning for retirement is like aiming at a moving target that sometimes feels invisible. Determining how much to save and which investment tools to use can be challenging, especially with the ever-changing financial landscape and unpredictable future expenses like healthcare and long-term care. These factors make retirement planning a complex endeavor for Americans across all generations.

The Generational Divide in Retirement Planning

Financial concerns and preparation strategies vary significantly among different generations of Americans. From Baby Boomers already enjoying retirement to Gen Zers just beginning their careers, each generation faces unique obstacles and approaches to securing their financial future.

Since 2019, Fidelity Investments has conducted comprehensive studies examining how people view and plan for retirement. Their 2025 study analyzed 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 represents a 7 percentage point decrease from 2024, indicating growing concerns about retirement security. This year's study also addressed current retirees, primarily Baby Boomers, and their retirement experiences.

Baby Boomers: Navigating the Reality of Retirement

Many Baby Boomers (born 1946-1964) have either retired or are approaching retirement. The study reveals that over 70 percent of recent retirees feel their retirement is proceeding as planned. Nevertheless, many have been caught off guard by recent stock market volatility and rising costs, particularly in healthcare. Despite these challenges, 68 percent remain confident in their retirement plans.

The top three sources of retirement income for current retirees include:

Social Security (77 percent)
Pensions (48 percent)
Personal savings (41 percent)

Though many Baby Boomers 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 healthcare costs, and increased life expectancy, some Boomers are delaying Social Security benefits until full retirement age or seeking part-time work to supplement their income.

Generation X: The Struggling "Sandwich Generation"

Generation X (born 1965-1980) exhibits the lowest confidence level among all generations, with only 53 percent feeling assured about retiring on their own terms. This group faces unique challenges as the "sandwich generation," often simultaneously juggling mortgages, children's education expenses, and caring for aging parents.

These multiple financial responsibilities significantly hinder their ability to save adequately for retirement. Many Gen Xers are behind on savings due to economic downturns, student loan debt, and high living costs. At 45 percent, Gen Xers identified saving enough money for retirement as their biggest challenge—the highest percentage among all four generations surveyed.

Many Gen Xers, concerned they won't have enough saved by retirement, may still have time to course-correct by increasing their 401(k) and IRA contributions or investing in real estate and other assets to create additional income streams.

Millennials: Balancing Debt and Uncertain Futures

Millennials (born 1981-1996) show a surprisingly high 71 percent confidence level in their retirement planning, despite facing significant hurdles with student loan debt, high housing costs, and job market instability that have delayed their ability to save. Many entered the workforce during the Great Recession, which negatively impacted their earnings and savings potential early in their careers.

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 rather than traditional retirement.

Many Millennials work in unconventional roles without access to employer-sponsored retirement plans. Those without these traditional benefits are exploring alternative investment options, including the stock market and cryptocurrency, to build their retirement nest eggs.

Generation Z: A Cautious Yet Optimistic Beginning

Generation Z (born 1997-2012) is just entering the workforce but has already witnessed economic downturns, high inflation, and ongoing discussions about Social Security's long-term viability. As a result, they tend to be more financially cautious than previous generations were at their age.

Despite these challenges, 75 percent of Gen Z express confidence in their ability to retire on their own terms—the highest percentage among all generations. This optimism likely stems from being in the early stages of their careers with time on their side.

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

Valuable Lessons From Today's Retirees

Even though sources of retirement income will differ for future retirees, today's retirees offer valuable advice to those following in their footsteps. Here are their top recommendations for individuals beginning to plan for, or approaching, retirement:

Pay down debt. 42 percent of retirees recommend eliminating high-interest debt before focusing heavily on retirement savings.
Begin saving early. Two-thirds (67 percent) of retirees suggest saving for retirement as early as possible, even if starting with small amounts.
Contribute to retirement plans. Over half (58 percent) of retirees encourage younger workers to take full advantage of employer-sponsored retirement plans, such as 401(k)s and 403(b)s.
Learn more about retirement benefits. 41 percent suggest thoroughly understanding the uses and limitations of retirement benefits, such as Social Security and Medicare.
Consult a financial advisor. More than a third (37 percent) recommend working with a financial advisor to create a successful retirement plan.

Preparing for a Secure Retirement Future

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

The most successful retirement strategies typically involve a multi-faceted approach that includes:

Creating a comprehensive retirement savings plan early
Regularly reviewing and adjusting investment strategies
Understanding tax implications of different retirement accounts
Developing a clear picture of expected retirement expenses
Establishing proper estate planning documents

For the best possible retirement outcome, consider working with both a qualified financial planner and an experienced estate planning attorney. While financial planners can help optimize your savings and investment strategy, estate planning attorneys ensure your assets are protected and distributed according to your wishes, completing the retirement planning picture.

This comprehensive guide was last updated on April 29, 2025, reflecting current retirement planning trends and generational differences.