There’s plenty of data showing younger people have a tougher time financially today than previous generations.

It’s harder to buy a home. Student loan balances can be astronomical. Wage growth hasn’t kept up with corporate profit growth. Inflation has eaten away at spending power.

But how are younger people doing with retirement savings?

Fidelity recently published the second-quarter edition of its Building Financial Futures report, offering a window into the investing patterns of savings behaviors of its clients.

The report is stacked with data, but we’ve pored over it and pulled out four interesting takeaways about how Generation Z and millennial savers are socking away money for their post-working years.

Millennial savers are approaching an important savings milestone

Millennials have an average of $94,300 in retirement accounts, according to the report, approaching a crucial retirement savings milestone: the $100,000 mark.

They’re nearly done with what investing legend and Warren Buffett’s right-hard man said was the hardest part about investing.

“The hard part of the process for most people is the first $100,000,” Charlie Munger said at Berkshire Hathaway’s 1999 shareholder meeting. “If you have a standing start at zero, getting together $100,000 is a long struggle for most people.”

His comment piggybacked off of the point Buffett had made moments before: building wealth successfully is helped by starting early so that compound interest can start to grow your wealth for you.

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While $100,000 is an arbitrary amount, the higher your portfolio value goes, the more noticeable the impact of compounding becomes.

The report found Gen Z’s average balance is $20,800.

Younger people are seeing lower employer contributions

Gen Z and millennials have lower employer contribution rates in their retirement accounts than older generations.

Here are the numbers:

Baby boomers: 5.1% employer contributionGen X: 5.1%Millennials: 4.8%Gen Z: 4.1%

This indicates that Gen Z and millennials may be leaving money on the table, and not taking their full employer match by setting their savings rate to be lower per paycheck.

Gen Z loves target date funds

Target date funds are most popular with younger people, with 80% of Gen Z with all of their money in a target-date fund, compared to 46% of boomers. Target date funds automatically adjust your exposure to stocks and bonds as you get closer to retirement.

That’s likely due to a couple of factors. One is that target dates came to be in the 1990s, and have steadily grown in popularity since then, meaning boomers and Gen X likely weren’t as exposed to them when they started saving.

Second, target date funds are now the default option for many employer-offered retirement accounts. So, if an investor doesn’t have an idea for where else to put the money and doesn’t want to actively manage their account, a target date fund can make sense.

Gen Z savers are upping their savings rates most aggressively

One encouraging stat from the report is that Gen Z is the generation most aggressively increasing its savings rate.

This probably ties in with younger people generally having a lower savings rate to begin with, leaving more room for upside.

But it could also be due to a new law change. Last year, the SECURE 2.0 Act made auto increases in retirement savings rates mandatory for many new 401(k) accounts created after December 28, 2022. The increases continue until savings rates hit a range of 10-15%, though employers can adjust these rates at any time.