Here's something you probably didn't expect: Gen Z is beating baby boomers at retirement planning. A new analysis from Vanguard reveals that younger workers are gaining ground on retirement preparedness while millions of boomers stare down widening savings gaps.

The Generational Flip

Vanguard's 2025 Retirement Outlook shows nearly half of Gen Z workers are on track to maintain their standard of living in retirement. That's 47% for Gen Z compared to 42% of millennials and just 40% of baby boomers who are actually approaching retirement age.

How did this happen? Better plan design features, according to Nicky Zhang, a Vanguard investment strategist who co-authored the research. "Younger workers are benefiting from better plan design features like autoenrollment, automatic escalation of saving rates over time, and investment in qualified default investment alternatives, but managing debt remains essential," Zhang explained.

In other words, younger workers are being nudged into good habits automatically while older generations had to figure it out themselves.

Access Changes Everything

The real story here is about access. Workers with defined contribution plans are nearly twice as likely to be on track for retirement—54% versus just 28% for those without access. Vanguard estimates that six in 10 Americans would be retirement-ready if every worker had a plan. That's a massive difference driven by a single structural factor.

Meanwhile, baby boomers face the roughest terrain. The median boomer is projected to fall $9,000 short annually, representing about a quarter of their expected expenses. That's not a rounding error—it's a real lifestyle adjustment.

Co-author Fu Tan offered some practical optimism: "For many, the path to greater retirement security isn't about dramatic sacrifices. It can be achieved by making smart use of retirement plans and savings vehicles, considering part-time work, or simply allowing a bit more time before retiring."

Making Half a Million Work

Financial personality Vincent Chan recently laid out how retirees could stretch a $500,000 portfolio by keeping expenses low and using a 4.7% withdrawal rate. He assumed a 9% annual return and noted the portfolio could still grow if retirees avoided panic-selling and lived modestly.

Chan also recommended a smart tax move: taking withdrawals from traditional accounts up to the standard deduction so married couples could keep $23,500 a year tax-free, while letting Roth IRAs continue growing untouched.

Separately, retirement expert Brandon Buckingham highlighted one of the most overlooked mistakes: failing to update IRA beneficiary forms. With 57.9 million U.S. households holding IRAs as of mid-2024, keeping beneficiary designations current matters more than ever, especially since those forms override your will.