Realistic or delusional? Gen Z plans to retire at the age of only 54 — the soonest of all generations. But here's what the data really says

The young’uns seem to have reset their expectations from a year ago, when Gen Z planned on retiring at age 49, Empower says.

But even after this adjustment, is Gen Z’s retirement goal too lofty to achieve? Here’s what the data really says.

Is Gen Z setting realistic goals?

Having a $1 million nest egg was long considered the standard for a comfortable retirement, Americans now expect they’ll require $1.27 million, according to a study from Northwestern Mutual.

But many members of Gen Z are just starting their careers while grappling with high inflation, high interest rates and pricey student loan payments. Factoring in essential costs, plus any amount used to pay down debt, there might not be much left over after each paycheck to put toward retirement.

Although some economists have bandied about the idea of a great wealth transfer from older generations to their children, it doesn’t seem like many are counting on it. Empower’s survey shows 67% of respondents value being able to take care of themselves today over passing on wealth to future generations, including 75% of the boomer generation.

How Gen Z can get on track

Whether they’re hoping to shed their blazers and briefcases early in life or are simply aiming to simply retire at some point, Gen Z isn’t without options to prepare for the future.

The best way to get started is to keep track of your spending by creating a budget. This can be as straightforward as keeping track of your income and expenses on a spreadsheet, or you can use tricks such as the “cash stuffing” technique.

Cash stuffing involves cashing your paycheck and dividing it into different envelopes to be used for different labeled purposes. This should keep you from overspending on certain purchase types, such as groceries or entertainment. And, of course, don’t forget about allocating a set amount toward your retirement savings.

Some younger folk are also choosing to “soft save” for retirement instead, to take some of the pressure off meeting a hard goal or deadline. This mindset allows you to enjoy life in the moment and not forgo small luxuries, but still save something each month to go toward your retirement fund. You can always adjust your savings goal and decide to save a little more each time.

Be sure to grow your savings in a tax-advantaged account to make the most of your retirement fund as well.

And while you might be leery of putting big chunks of money into the stock market, you can start small by investing your spare change into an automated portfolio. Once you’re more comfortable, you can look into pouring more of your paycheck into larger investments.