Meanwhile, the majority of Gen Zers (37%) estimate they’d be able to comfortably live on around $500,000 to $1 million in their old age, or in some cases, even before even hitting middle age.
14% of the youngest generation of workers aim to retire in their 40s—double the number of millennials who expect to retire between the ages of 40 and 50.
Most millennials realistically think they’ll retire between 51 and 60 years old.
But in reality, those who are actually reaching retirement age are taking stock of the current climate and realizing they can’t afford to retire.
Although Gen Z’s early retirement plans may be somewhat unrealistic, starting retirement planning is never too soon.
Depositing a monthly investment of $100 into an account with a 12% yield would net someone approximately $1,188,342 in 40 years’ time. But the longer you delay your investment journey, the lower the accumulated amount of money will be.
A millennial who started their investment journey just five years later, at age 30, would accumulate around $649,626 by age 65.
What’s more, the 12% annual average rate of return, which would make a Gen Z worker a millionaire before the age of retirement, is a conservative percentage, according to Orman, who estimates you can expect up to a 25% rate of return on your money.
“You want to play and have fun, that’s on you later on in life when you can’t pay your bills,” she warned. “If there’s anything the younger generation needs to understand, it’s that the key ingredient to any financial freedom recipe is compounding.”
