As Investopedia reports, many Americans think they need at least $1.5 million to retire. However, data released by the U.S. Federal Reserve in 2025 showed that only around 2.5% of Americans have at least $1 million in retirement savings. Of all surveyed Americans, only 54.3% have a retirement savings account.
While having a high income is a key component of living and retiring in comfort, it’s not the only “ingredient.” Having a solid investment and retirement portfolio is just as crucial, regardless of one’s age, although it’s ideal to start investing as early as possible. The earlier a person implements savvy investment strategies, the sooner they can begin building wealth.
In this guide, we’ll take a closer look at how investments are evolving based on generation. Keep reading, as what you learn here can help you enhance and optimize your retirement planning.
Generation Z
Gen Z typically includes people born from 1997 to 2012, making them about 13 to 28 years old by 2025. It might seem that they’re “too young” to start planning for their financial security by saving for retirement and making investments, but studies have found that not only have they started early, but they’re good at it, too!
A news article from CNBC published in May 2024 reported that the average Gen Zer started their retirement savings at 22 years old. Millennials, on the other hand, began at 27, Gen Xers at 31, and Baby Boomers at 37. Gen Zers are investing in their workplace retirement plans and even real estate.
Aside from starting early, Gen Zers are also more into non-traditional investment classes, particularly cryptocurrency. They’re the most likely to put money into this, with 42% already owning crypto, according to Equities.com. Conversely, only 36% of Millennials, 24% of Gen Xers, and 8% of Baby Boomers do.
One reason Gen Zers are more likely to invest in crypto like Bitcoin, Ethereum, XRP, or Tether than their predecessors is that they grew up in an era in which the World Wide Web has vastly improved. Amid this technological growth and internet innovation came easier access to online investments, including digital assets.
Millennials (Generation Y)
Millennials, also called “Gen Yers” and born between 1981 and 1996, may have started investing and managing retirement funds later than Gen Zers, but they’re building wealth faster than older generations. USA Today says that Millennials’ wealth quadrupled from mid-2019’s $4 trillion to $16 trillion by the third quarter of 2024. One of the possible reasons behind this is that Gen Yers had more time to recover from the Great Recession.
Although it doesn’t apply to all Millennials, many in this generation learned a lot about finances. They have lived through not only the Great Recession but many other economic downturns, such as the 9/11 terrorist attacks and the COVID-19 pandemic.
With many Gen Yers now being parents themselves, they’ve also learned to become financially savvier with child-rearing. Members of this generation have become more proficient in things like maintaining a spending diary and meal preparation. It has also become a common practice for Millennials to save for their kids’ education and find answers to ongoing concerns like “What is the average school budget?” or “Do tariffs affect back-to-school costs?”
Millennials, as younger investors, are also diversifying retirement savings and investments by exploring alternative asset classes. Examples include crypto, private equity, and real estate.
Generation X
Out of all generations, Gen X, which consists of people born between 1965 and 1980, appears to have the highest level of financial anxiety.
A report from the Allianz Life Insurance Company of North America found that seven in ten Gen Xers are more afraid of running out of money than they are of death. Many Millennials and Baby Boomers share the same sentiment, but the rates are lower (66% and 61%, respectively). The report also provided other eye-opening insights regarding retirement and savings:
- Common reasons for such fear: Inflation, high taxes, and concerns about Social Security being an inadequate form of financial support
- Less than a quarter (23%): Percentage of surveyed Americans who talked to a financial expert (regarding their worries of running out of money)
- About six in ten Americans (62%): Percentage of those who admit not saving as much as they’d like for retirement
One of the biggest possible reasons behind Gen X’s fears is that it was during their generation that employers began to offer more 401(k) plans instead of traditional pensions. The transition resulted in Gen Xers having to be more proactive in making decisions on savings and investment strategies.
Also called “defined benefit plans,” pension plans provide a guaranteed monthly retirement income, often based on an employee’s salary and years of service. With this retirement plan, the employer takes on the investment risk.
On the other hand, 401(k)s are contribution plans, wherein the employee takes on the responsibility of managing their plans. The employee chooses how much and which investments to include and bears the risk.
Baby Boomers
Baby Boomers, people born from 1946 to 1964, are already in retirement or nearing retirement. However, many members of this generation, particularly Peak Boomers, the youngest of this demographic cohort, are “unretiring” or postponing leaving the workforce. They’re doing so for reasons like not having enough savings or income from an investment retirement portfolio to rely on.
Some Boomers are also taking a page out of their younger counterparts’ books and diversifying their investments. While they still prefer low-risk assets with predictable returns (e.g., dividend-paying stocks and government bonds), some are allocating funds to alternatives like crypto.
Savvy Baby Boomers are also using their home equity to build their wealth, retirement savings, and income. Some are tapping it as a way to finance other investments, such as by taking a home equity loan to fund other investments.
Grow Your Retirement Portfolio Regardless of Your Age
Given today’s high living costs, saving up may no longer be enough to sustain you once you hit retirement. Expanding and diversifying your retirement portfolio, whether you’re a Gen Zer, Millennial, Gen Xer, or Baby Boomer, is therefore crucial to improving the stability and reliability of your investment returns. If you’re unsure where and how to start, consider speaking with a financial expert who can help point you in the right direction based on your current and future finances and goals.
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