Younger retirement savers are preparing for retirement earlier than their predecessors, giving them more time to grow their investments.

An annual report released this month by the Transamerica Center for Retirement Studies details the differences between Gen Z, millennials, Gen X, and baby boomers’ savings patterns. The report found that members of each generation typically started saving for retirement earlier than the one before it.

However, each generation faces unique financial challenges as they plan for retirement.

Generation Z (Born 1997-2012)

The median age at which Gen Z investors started saving for retirement is unprecedentedly low: 20. As this generation ages into the workforce, this number could change. 

Many older Gen Z workers faced employment struggles brought on by the COVID-19 pandemic, and experts suspect Gen Zers will change employers many times throughout their careers, making saving for retirement, keeping track of multiple retirement accounts, and deciding if they should consolidate them all necessary for this group.

Millennials (Born 1981-1996)

The median age at which millennials started saving for retirement was about 26. Even though most (85%) are actively saving for retirement, many millennials risk falling behind because they’ve faced significant economic turbulence in their adult years, experts said.

The Great Recession likely impacted older millennials’ first jobs, and nearly 60% said they still feel the economic impact of the COVID-19 pandemic. In part because of those setbacks, this generation is buying homes, getting married, and starting families later than previous generations.

Millennials are also becoming the new sandwich generation, as they are caring for young children and aging parents. 

Generation X (Born 1965-1980)

Gen X entered the workplace as 401(k)s started becoming the norm, which could explain why the median age at which this generation began saving for retirement was 30.

According to the Transamerica Institute, less than 20% of Gen Xers feel “very confident” they will be able to retire comfortably. Instead, many members of this generation expect to be 70 or older by the time they retire, or not retire at all.

Baby Boomers (Born 1946-1964)

The median age at which baby boomers began saving for retirement was 35, some 15 years later than Gen Z.

Many baby boomers were well into their careers as reliance on traditional pensions waned and the 401(k) retirement plans available today were more widely adopted. Because they began saving later on average, their assets have had less time to grow, and nearly 60% said they anticipate a late retirement, if any.

As baby boomers continue to age, health care costs and inflation could also deplete their retirement savings quickly.