Call it a really good start.
Gen Z, or individuals between the ages of 18 and 25, are paying attention to the importance of saving early for retirement. On average, Gen Z is putting away about 15 percent of their income for retirement living. Their older counterparts on the other hand, trail by 3 percent.
The numbers are the product of new research led by BlackRock, which also notes that the messaging of saving early and often for retirement is resonating with younger adults. They came of age during major economic and world events, which likely helped shape their mindsets. For example, they may have been brought up in a household that was without a traditional pension plan, which underscored the concept of self-sufficiency through savings.
Gen Z also witnessed the difficulties their parents and older relatives experienced during the Great Recession, which was marked by high unemployment, investment declines and home foreclosures.
While this is a positive development for younger workers, the survey also revealed that fewer Americans believe they are prepared to see out a successful retirement savings plan. About 63 percent of survey responders say that they are on track with their savings. Confidence levels were about 68 percent just last year.
On the heels of a worldwide pandemic and economic interruptions, the overall confidence downgrade is not a major surprise. Inflationary pressures and other market ups and downs are bringing down confidence levels of every generation.
Saving around 15 percent of income for retirement savings aligns with what financial experts recommend. Workers should feel comfortable if they can set aside 10-15 percent of their salary for their tax-friendly retirement account.
Clear eyed about what they need to do to succeed in retirement life, Gen Zers are also targeting the age of 63 for retirement. That age is slightly more ambitious than employed boomers, who hope to hang it up before turning 66.
No matter where you find yourself in your retirement savings planning, it’s never too late or too soon to save, as the Gen Zers can attest. As you approach your retirement goal, you might also be looking for forward-thinking strategies to boost your retirement savings in one swoop. If you’re approaching the golden age as a new retiree, you have the capacity to immediately boost your savings and buying power through a Home Equity Conversion Mortgage*.
A Home Equity Conversion Mortgage usually requires a 50 percent commitment. In exchange, borrowers will no longer make monthly payments as residents of the home. In addition, they will enjoy new financial freedom and flexibility to carry on with retirement as planned.
Please contact us today to learn more about this opportunity to boost your income, eliminate the mortgage payment and make good on your much-deserved retirement plan.
*(1) at the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds; (2) charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees; (3) the loan balance grows over time and interest is charged on the outstanding balance; (4) the borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home; and (5) interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment. This material is not from HUD or FHA and has not been approved by HUD or any government agency.