Cost of living hinders younger generations from saving for retirement: Fidelity

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Retired nurse Joyce Fleming shares why she decided to return to work due to rising costs.

A new report from Fidelity Investments finds that over half of Millennials and Gen Z believe they will have a harder time saving for retirement due to the higher cost of living.

Fidelity's 2024 State of Retirement Planning study found that 57% of Millennials and 56% of Gen Z believe they will have a harder time saving for retirement than their parents did due to the higher cost of living – figures that are markedly higher than the 38% of Gen X and 16% of Boomers who expressed those concerns.

Respondents across generations cited higher costs from inflation, consumer debt and the need to build emergency savings as the main barriers to reaching their retirement savings goals. However, younger generations cited additional challenges such as dealing with student loan debt, saving for a home and a wedding, as well as childcare costs.

In light of those challenges, Americans of all generations said they wished they had started planning for retirement earlier. The study found that on average, Gen Z respondents said they started planning for retirement at age 20 when they wished they had started at 17, while Millennials started at 27 and wished they had at 22.

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Over half of Millennial and Gen Z workers said they think it will be harder for them to save for retirement than their parents because of the cost of living. (Photo by Paola Chapdelaine for The Washington Post via Getty Images / Getty Images)

Retirement savers noted that recent legislative changes have made it easier for them to save, such as the enactment of the SECURE 2.0 Act. 

The law gave employers the ability to make contributions