Generation Z – those born between 1997 and 2012 – are the newest workers on the scene and, despite the pandemic, inflation, and everything else we’ve gone through in the last few years, they remain optimistic about their futures. Their average estimated retirement age is 63.6, according to a recent BlackRock survey. That’s nearly 2.5 years earlier than when most baby boomers plan to retire.
But when you dig below the surface, some major red flags arise. Chief among them: underestimating how much of a nest egg they will need to live comfortably in retirement.
Left uncorrected, they could leave Gen Z in a real pickle when it comes time to retire.
Being too optimistic can be a problem in retirement planning
It’s impossible for anyone to predict exactly how much they’ll spend in retirement, which is why it’s always better to be a little too pessimistic about your expenses than too optimistic. If you save more than you need, you’ll have a little extra to pass onto your heirs. If you save too little, you’re going to have serious problems paying your bills.
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While people of any generation can make this mistake, it seems especially common among younger workers. About 36% of Gen Z respondents surveyed said they would need a nest egg of less than $250,000 to retire comfortably, according to BlackRock. The same survey found…