Inflation has taken a toll on the economy and the lives of many. Global nations are trying their best to bring down soaring inflation. Rising inflation figures have been well-supplemented by rising interest rate notices from most central banks worldwide. Most governments’ hawkish stances have proven to be troublesome for consumers.
The rise in inflation is proving to be concerning for Gen Z and millennials. The standard savings benchmark for retirement has long stood at $1 million. However, soaring inflation has raised the benchmark three-fold. A recent study conducted by Wealthcare Financial states that Gen Z and millennials need at least $120,000 to $150,000 per year to live a comfortable life.
Inflation pushes average retirement savings to $3 million
The study reveals that the average retirement savings required for Gen Z and millennials is now $3 million. Wealthcare Financial experts believe that the price of everyday things like gas and groceries, including the cost of living, is rising. To add to the list, rent and home prices are also rising and will be even higher by the time the younger generations retire.
“Inflation plays a big role when we are planning for retirement, especially for the younger generations, because the price of necessities will go up over the course of their lifetime.” “Three million dollars is the upper end of the range that will be needed, depending on current income,” said Shaun Tarzy, managing partner at Wealthcare Financial.
Tarzy added that this amount should be the goal, but not necessarily the entire amount that they need to save. The study also reveals that the clients save an average of $500 per month for their retirement. However, Tarzy stated that the rule of thumb is to save at least 15% to 20% of your gross income.
Gen Z and millennials should have $500,000 saved for retirement by age 25, $1 million by age 40, $2 million by age 50, and $3 million by age 60, according to a Wealthcare Financial report.