How Americans Fund Retirement
Most unretired Americans plan to rely on Social Security as their primary source of retirement income, followed by a 401(k). Side hustles will also play a key role across generations. They ranked third overall and were among the top 3 expected income sources for Gen Z (39%), millennials (41%), Gen X (42%), and baby boomers (38%).
Many people (65%) said they plan to rely on multiple income sources in retirement. Gen X (71%) and baby boomers (68%) were the most likely to say so, while fewer millennials (61%) and Gen Z (60%) expected to do the same.
Still, not everyone had a clear plan. More than 1 in 10 respondents (14%) weren't sure whether they would have one or multiple income streams. Gen Z was the most uncertain, with 18% unsure about their future financial strategy.
Inflation's Impact on Retirement
Inflation remains a key concern for Americans planning their retirement. In 2024, the average inflation rate was 2.9%, with monthly rates peaking at 3.5%. So far in 2025, inflation hit 3.0% in January and declined to 2.8% in February.
Even with this downward trend, essential costs — such as housing, healthcare, and daily expenses — continue to rise, making it harder for people to feel financially secure. These ongoing increases have led many Americans to rethink their retirement timelines and financial strategies.
Retiring comfortably means having enough savings and income to cover essential expenses, maintain your lifestyle, and handle unexpected costs without financial stress. Nearly half of unretired Americans (49%) were not confident that they would be able to retire comfortably, with Gen X being the least confident (52%).
Overall, respondents projected that they would need $1.14 million to retire comfortably. This amount differed across generations as follows:
- Gen Z: $1.25 million
- Millennials: $1.22 million
- Gen X: $1.18 million
- Baby boomers: $760,000
To stretch their savings, some would consider retiring abroad. More than a third (34%) said they're open to moving to another country for a lower cost of living, while another 36% were still weighing the idea. Gen Z was the most open to this option (40%).
For others, retirement felt out of reach entirely, with 1 in 4 believing that they won't ever be able to retire. On average, Americans said they now expect to retire at 70 — 6 years later than their ideal retirement age of 64 — due to inflation and market volatility (the frequent swings in stock prices and economic conditions that affect retirement savings).
Many people (65%) said they plan to rely on multiple income sources in retirement. Gen X (71%) and baby boomers (68%) were the most likely to say so, while fewer millennials (61%) and Gen Z (60%) expected to do the same.
More than half of unretired Americans (53%) haven't changed their retirement savings strategy due to inflation and market volatility. However, others have made the following shifts:
- 19% have delayed their expected retirement age.
- 13% have reduced their retirement contributions.
- 13% have increased their retirement contributions.
- 11% have shifted to safer investments.
Among those who lacked confidence in retiring comfortably, 26% delayed their expected retirement age, and 16% cut back on contributions. These rates are higher than the overall averages, suggesting that uncertainty about retirement is leading some to take a more cautious financial approach. In contrast, 9% of confident Americans increased their retirement savings, showing how financial security can encourage a more proactive strategy.
Gen Z stood out for taking the most aggressive approach, with 19% increasing their retirement contributions amid inflation and market volatility — the highest of any generation. This suggests that younger savers may be more willing to take risks and invest for long-term growth, even in times of economic uncertainty.
AI in Retirement Planning
As retirement planning evolves in response to shifting economic conditions and funding challenges, many Americans are exploring new tools to help secure their financial future — including AI-driven financial solutions. Unretired Americans are open to AI-driven financial tools, with nearly half (47%) saying they would trust AI to help with retirement planning. Yet, a third said they would not trust using AI in this case, and 20% were unsure.
Many also said that while they would trust AI tools to some extent, they still favored human advisors. This trend was common across generations and included 37% of baby boomers, 38% of Gen X, 36% of millennials, and 38% of Gen Z. Only 10% of respondents trusted AI tools more than human experts, including 7% of Gen Z.
AI-driven financial tools (48%) were far more trusted than social media influencers (10%) for financial advice. However, Gen Z (24%) stood out as being the most likely to trust a social media influencer over AI. Skepticism remained overall, with 42% of respondents preferring traditional advisors or their own research over either AI or influencers.
More than 1 in 10 unretired Americans (12%) have used AI-driven financial tools for retirement planning, with millennials (16%) and Gen Z (15%) leading the way.
Finding Security in Retirement
For many Americans yet to retire, their financial future feels uncertain. Rising costs, market volatility, and shifting financial strategies are making it harder to feel confident about the future. While most people plan to rely on multiple income sources, their approaches vary. Some are turning to side hustles and AI-driven tools, while others still prefer traditional sources of retirement income and advisors.
Younger generations, in particular, are testing new strategies, but across the board, flexibility and proactive planning will be essential for securing a stable retirement. Whether through diversifying income streams, adjusting savings strategies, or exploring new financial tools, those who stay adaptable will be better positioned to navigate the changes ahead.
Methodology
We surveyed 1,002 Americans who have not yet retired to explore how they are planning for retirement and the financial challenges they face. The generational breakdown was as follows: Gen Z (15%), millennials (34%), Gen X (35%), and baby boomers (16%). The data was collected in February 2025.
About Western & Southern Financial Group
Founded in Cincinnati in 1888 as The Western and Southern Life Insurance Company, Western & Southern Financial Group, Inc., a Fortune 500® company at No. 284, is the parent company of a group of diversified financial services businesses. Its assets owned ($80 billion) and managed ($42 billion) totaled $122 billion as of Sept. 30, 2024.1 Western & Southern is one of the strongest life insurance groups in the world. Its seven life insurance subsidiaries (The Western and Southern Life Insurance Company, Western-Southern Life Assurance Company, Columbus Life Insurance Company, Gerber Life Insurance Company,2 Integrity Life Insurance Company, The Lafayette Life Insurance Company, and National Integrity Life Insurance Company) maintain very strong financial ratings. Other member companies include Eagle Realty Group, LLC; Fabric by Gerber Life; Fort Washington Investment Advisors, Inc.;3 Gerber Life Agency;4 IFS Financial Services, Inc.; Touchstone Advisors, Inc.;3 Touchstone Securities, Inc.;5 W&S Brokerage Services, Inc.;3,5 and W&S Financial Group Distributors, Inc.6 Western & Southern is a title sponsor of several major community events every year. From 2002 to 2023, it served as title sponsor of Cincinnati's longtime professional tennis tournament — now named the Cincinnati Open — an ATP Masters 1000 and WTA 1000 event and one of the world's largest tournaments. The company continues to serve as a major sponsor of the event.
1 The financial information presented here is preliminary and unaudited.
2 Gerber Life is a registered trademark. Used under license from Société des Produits Nestlé S.A. and Gerber Products Company.
3 A registered investment advisor.
4 In the State of California, Gerber Life Agency, LLC is known as and does business as Gerber Life Insurance Agency, LLC.
5 A registered broker-dealer and member FINRA / SIPC.
6 W&S Financial Group Distributors, Inc. (doing business as W&S Financial Insurance Services in CA).
Review our current financial ratings.
From Fortune ©2024 Fortune Media IP Limited. All rights reserved. Used under license. Fortune and Fortune 500 are registered trademarks of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse the products or services of Western & Southern Financial Group.
Fair Use Statement
Feel free to share these findings for noncommercial purposes, but be sure to include a link back to this page.
