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By Lee Barney

Nearly 60 percent of Gen X (59 percent) and Gen Y (56 percent) are automatically saving for retirement, compared with 46 percent of Baby Boomers, a survey found.

The younger generation is also more eager to get started on their retirement savings. The average Gen X’er, or those age 36 to 47, and Gen Y’er, or those 23 to 35, got a running start on their retirement nest egg in their mid 20s. By comparison, the average Boomer, aged 48 to 66, began saving for retirement at 35, according to a survey by TD Ameritrade.

“Gen X and Y have accepted the reality of the past few years, and rather than being discouraged, they are using what they’ve witnessed to their advantage by saving earlier and regularly,” noted Carrie Braxdale, managing director, investor services at TD Ameritrade Inc., a broker/dealer subsidiary of TD Ameritrade Holding Corporation. “The hope is that tomorrow’s investors, Gen Z, follow suit as they near retirement.”

Only 8 percent of Gen Z, who are between the ages of 13 and 22, are saving for retirement, although 41 percent think that is never too early to begin saving for retirement. Conversely, 71 percent of the parents of Gen Z agreed with the statement that it is never too early to begin saving for retirement. However, 56 percent of Gen Z has a savings account, attributing this mainly to conversations with their parents. 82 percent of Gen Z’ers whose parents have spoken about the importance of saving, say the talk has focused on saving in general. For 67 percent, the talks have been about saving for college while the parents of 38 percent have spoken to them about retirement savings in particular.

The conversations appear to be having an impact as only 35 percent of Gen Z says they expect to count on Social Security by the time they retire. 61 percent of the parents of Gen Z, on the other hand, are counting on Social Security. 39 percent of Gen Z expects an inheritance and thinks that they will not need to save for retirement, but only 16 percent of the parents of Gen Z think that the estate they leave their children will set them up adequately for retirement.

TD Ameritrade believes that while Gen Z has some appreciation for the need to accumulate a retirement portfolio, they could use more coaching. As Braxdale put it: “The good news is that Gen Z is starting off with a good understanding of the importance of saving. But that does not mean they should wait to become more educated on proper long-term savings habits. We encourage parents to talk to kids specifically about retirement savings to ensure they understand the importance of getting a head start and taking advantage of the power of compounding.”

Barney, L. (2012, August 28). Gens X and Y Beat Boomers in Retirement Saving. Retrieved from: