Vanguard says Gen Z is more retirement-ready than boomers — but only 40% are on track. Catch up before it’s too late

Vanguard's 2025 Retirement Outlook reveals that only 40% of baby boomers are likely to maintain their current lifestyle in retirement, while 47% of Gen Z workers are projected to do so. This surprising finding contradicts the stereotype that young Americans prioritize immediate pleasures over long-term financial planning.

Gen Z workers, aged 24 to 28, have less money than boomers, but they possess a key advantage: time. With a median annual retirement spending shortfall of $3,000 (7% of their needs), Gen Z has more time for their contributions to grow. In contrast, baby boomers, aged 61 to 65, face a $9,000 ($24%) shortfall.

The gap can be attributed to workplace retirement plans. While one in three Gen Z workers has access to a defined-contribution plan, only one in four boomers at the same age enjoy this benefit. Plans today also include automatic enrollment, contribution increases, and target-date funds to simplify investing.

Vanguard's Nicky Zhang attributes much of the gap to better plan design features. The firm's Advisor's Alpha research suggests that professional financial guidance can add 3% or more in net returns through personalized financial planning, behavioral coaching, and tax-efficient investing.

Gen Z can still catch up by maximizing remaining contributions, reevaluating retirement timing, and making idle cash work harder. Investing $500 a month for 10 years could grow to $86,500, resulting in a potential gain of over $26,000, assuming a 7% annual return and monthly compounding. Acorns allows users to schedule recurring investments that fit their budget, handle routine work, and recommend a diversified portfolio based on their goals, timeline, and risk tolerance.