Here’s the Average Age Americans Start Saving for Retirement. How Do You Compare?
If you ask older American workers about their retirement plans, most will tell you they wish they had done one thing differently: start sooner.
According to a recent national report, 85% of private sector workers aged 45 and older regret not participating in their retirement plans earlier in their careers. Furthermore, 88% wish they had better understood the benefits of increasing those contributions from the start.
This data comes from a study conducted by Edelman DxI on behalf of Nationwide. Researchers polled 2,200 employed US adults age 22 and older who have access to employer-sponsored retirement plans to examine how different generations approach their financial futures.
The numbers show a surprising truth for older workers. On average, current workers over the age of 45 didn’t start contributing to their workplace programs until they were 35. That’s a huge delay, costing them a decade of potential growth.
11 year profit
Fortunately, young workers seem to be learning from the struggles of previous generations. Research shows that Gen Z and millennial workers start from scratch.
Workers ages 22 to 34 reported starting their workplace plan contributions at age 24, on average. That gives them an 11-year head start compared to their older counterparts. By entering the market more than a decade earlier, these young investors can use the time to build wealth with less stress on their monthly budget.
They also keep a close eye on their money. Nationally they found that 53% of workers aged 22 to 34 check their superannuation balances at least once a week, compared to 38% of those over 45.
New tools and new concerns
How younger workers learn about money is also changing, compared to older respondents. While financial professionals and family members remain the usual sources of advice, young savers are turning to technology.
Half of participants aged 22 to 34 admitted to using AI productivity tools like ChatGPT for financial guidance. Social media plays a big role as well, with 42% consulting TikTok and 36% looking to Instagram for advice.
Older generations, in contrast, stick more to human resource departments and financial advisors.
However, this constant communication and knowledge can have its downsides. The report highlights that young workers are more prone to make emotional decisions. About 24% of the younger group believe the economy will grow in the next six months, and they are more likely to admit that fear or hope is what drove their investment choices.
There is also a knowledge gap that needs to be addressed. Despite their early start, less than half of private plan participants fully understand how compound interest works. While the excitement is there, the basics may still need some work.
The takeaway is clear: Older workers look back with regret, while younger ones look forward with initiative. If the youngest generation can control their anxiety and stick to their strategy, that 11-year-old head start can make a difference.
Summarizing the findings, Cathy Marasco, head of Protected Retirement in Nationwide, says:
“Young conservationists are showing that early engagement and proactive planning can create confidence and resilience, while older generations provide a critical perspective on the dangers of waiting to act.
As we think about resolutions to create better financial habits in the coming year, these insights give us all a clear road to building a stronger financial future.”
Want to grow your nest egg? If you have more than $100,000 in savings, get advice from a professional. SmartAsset offers a free service that matches you with a vetted, fiduciary advisor in less than 5 minutes.
