How Does Your Preparation Compare?

It's important to consider whether you're saving enough to maintain your lifestyle after retiring.Credit: Getty Images — It’s important to consider whether you’re saving enough to maintain your lifestyle after retiring.
Credit: Getty Images

Key Takeaways

Fewer than half of people saving for retirement are on track to maintain their current lifestyle in retirement, according to Vanguard.
Older Gen Z workers (ages 24-28) are the best prepared, with 47% on a trajectory to keep up their lifestyles in retirement. Millennials (42%), Gen Xers (41%), and younger Baby Boomers (40%) are less prepared.
Working just two years longer would significantly increase the number of workers who could maintain their current lifestyles in retirement, Vanguard found.

Regardless of where you are in your career and how long you have until retirement, proper planning for a post-work life means ensuring you’ll have enough money available to continue to support yourself adequately.

With many workers experiencing lifestyle creep as they build their income throughout their careers, it’s important to consider whether you’re saving enough to maintain your lifestyle after retiring.

According to Vanguard’s 2025 Retirement Outlook report, fewer than half of retirement savers are on track to maintain their current lifestyles after leaving the workforce.

Retirement Preparation by Generation

Vanguard found that older Gen Z workers (ages 24-28) are the best prepared to maintain their lifestyle in retirement, with 47% beginning their retirement savings journey on the right track.

That percentage falls slightly with older generations, as 42% of millennials, 41% of Gen Xers, and just 40% of preretirement Baby Boomers are adequately preparing to maintain their current lifestyle later in life.

It’s worth remembering, however, that though their savings may lag, almost 90% of Baby Boomers own a home, so tapping into home equity or selling a home and renting may be another option to provide support in retirement.

How To Make Sure You’re on Track

Evaluating whether you’re adequately prepared for retirement requires consideration of your current retirement savings, your capacity to save, your current and anticipated expenses, and the time you expect to continue working. Retirement planning experts often suggest aiming to save between 10 and 12 times your final (or highest) salary, to replace about 70%-80% of your cost of living preretirement.

For younger retirement planners, making consistent contributions to retirement accounts is essential to capitalize on the power of compounding.

Those approaching retirement in the coming years but without enough savings should check if they can make catch-up contributions.

If you have access to a defined contribution plan, it’s important that you take advantage of your employer’s matching contributions program, if there is one. Not taking advantage of an employer match is like leaving free money on the table.