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.
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Gen Xers — caught in the middle, as always — came of age during America's bumpy transition from pensions to 401(k)s and missed out on many of those default features. Boomers, meanwhile, have had to contend with their own set of challenges, including the Great Recession — which happened at just the wrong time for many of them, during their peak earning years.
At the younger end of the savings spectrum, Generation Z and millennials have one significant advantage: They often make better investment decisions automatically, thanks to 401(k) features like auto-enrollment and auto-escalation. They also benefit from being more engaged investors, due to social media and other financial education resources.
Andre Jean-Pierre, the founder of
"I wouldn't call them sophisticated investors, but they are farther ahead of millennials" at the start of their careers, Jean-Pierre said. "They have more exposure to financial markets, whether it be through the news or social media. They understand it better."
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Here's a look at some of America's many generational saving gaps, with research from Vanguard, Prudential and the Center for Retirement Research at Boston College. What does this mean for savers, and employers and advisers that support them?