Why Gen Zers say they’ll need one-third of what boomers do in retirement

investmentnews.com:

Generation Z has opportunities to save for retirement like no generation before, and indications are that they are crushing it on 401(k) participation.

The problem, though, is that they have no idea about what life in retirement will cost. Consequently, their estimates about how much they will need to amass are wildly low.

The median amount identified by workers of all ages was $500,000, according to a report published today, the 23rd Annual Transamerica Retirement Survey of Workers. While that figure itself might be on the low end for what people actually need, a startling trend is that younger workers estimate they will require much less than people who are near retirement. While baby boomers cited a median amount of $750,000 necessary to feel financially secure in retirement, that amount fell to $500,000 among Gen Xers and millennials and just $250,000 for Gen Zers, according to results of the survey.

Gen Z is new to retirement savings but so far its efforts at retirement saving are “phenomenal,” largely because access to employer-sponsored plans and state-administered IRAs or other programs is higher than ever, said Catherine Collinson, CEO and president of Transamerica Institute.

Despite that access — with Gen Zers starting to contribute to a 401(k) at a median age of 19 — they are falling through the cracks in terms of retirement savings education, Collinson said.

“Many have not yet started pursuing major life events like getting married, starting a family, buying a home and seeing how expensive life can be,” she said.

In some cases, those workers are basing their retirement estimates on their current life expenses, she said. But nearly half of people, including Gen Zers, said they simply guessed when asked how