With retirement approaching, Gen X women say they will need more than $2 million to retire comfortably, the most of any generation of women.
That’s according to Northwestern Mutual’s 2024 Planning & Progress Study, which also found that Boomer+ women on average set their retirement goal at less than half that amount: $902,000. The study found the largest generational difference among women is in attitudes and beliefs: 60% Gen Z women expect to be financially ready to retire, while only 40% of Gen X women say the same. In general, the researchers found that Gen Z, whom they dubbed “Generation Zeal” is brimming with confidence about their finances.
The Northwestern Mutual 2024 Planning & Progress Study examines Americans’ attitudes, behaviors and perspectives on a wide range of issues that affect their long-term financial security.
Asked, how much they will need to save to retire comfortably, women on average answered $1.5 million. By generation, the answers were: Gen Z, $1.2 million; Millennials, $1.5 million; Gen X, $2.1 million; Boomers+, $902,000.
On average women reported they have saved $80,000 for retirement but need to save $1.4 million more than that. By generation, women reported saving: Gen Z, $16,000; Millennials, $60,000; Gen X, $95,000; Boomers+ $101,000. By generation, women reported their gap between savings and what the needed as: Gen Z, $1.2 million; Millennials, $1.4 million; Gen X, $2.0 million; Boomers+ $801,000.
Among Gen X women 42% said they do not feel financially secure, and 10% said they are unemployed and unable to work because an injury or an illness.
“It can be especially stressful to see retirement out on the horizon and not feel prepared,” said Kamilah Williams-Kemp, chief product officer at Northwestern Mutual, in a news release. “Now is the time for Gen X women to convert their anxiety into confidence with a plan – specifically, a comprehensive financial plan created with an advisor who gets you.”
Their experience should also be a wakeup call for younger women that building a great plan now can help make the most of the time to save, and reduce the worry down the road.”
Only 36% of women say they know how much money they need to retire comfortably, and 24% say they have less than one year of their current annual income saved for retirement. However, younger women in general expressed greater confidence than their older counterparts. Generation Z women plan to retire nine years sooner than Boomer+ women (age 62 vs. 71). Gen Z respondents also expect to pay off their college loans a decade earlier than Millennials (by age 33 vs. 43). Their confidence extends to retirement planning: 60% of Gen Z women expect to be financially prepared to retire when the time comes, while just 40% of Gen X women agree.
Younger women are more likely than women in other generations to report that their household income is growing faster than or keeping pace with inflation. Gen Z women also confident consumers; 57% say they will spend more or the same in 2024 while just 37% expect to spend less.
“The youngest generation of women is setting ambitious financial goals, and with their rising incomes, side hustles and early investing, they may have the financial fuel they need to reach them,” said Williams-Kemp. “The key question is this: alongside investing, will these young women protect what they’ve already built from risks, too? An investing-only approach leaves people alike vulnerable to unforeseen events in life – like a disability, illness or unexpected loss of a spouse. That’s why I encourage everyone to build a financial plan with a strong foundation in risk management to ensure that it’s built to last.”
