Retirement Revealed

How Middle-Income Retirees Are Winning at Retirement with Jean Chatzky


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Feb 26 2025 28 mins   17
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Jean Chatzky explores how retirement trends indicate that the middle class is winning at retirement and shares practical tips to prepare for retirement in 2025.


We could all use some good news when it comes to retirement, and my guest on this week’s episode of Retirement Revealed brings us exactly that. I sat down with Jean Chatzky, the founder and CEO of HerMoney.com and former columnist and contributor Forbes, Smart Money and the Today Show to discuss real-life retirement journeys, the evolving landscape of retirement savings, and the findings of a recent study from Principal Financial Group. Plus–how is Gen Z teaching a retirement lesson that every generation before them can learn from?


Women and Retirement: A Unique Challenge


Jean Chatzky has spent her career focusing on financial education, especially for women. As the founder of HerMoney, she has dedicated her efforts to bridging the knowledge gap for women, who often face distinct financial challenges.


“Women earn less over their lifetimes, take career breaks to care for family, and then end up living longer than men,” Jean explained. “That means they have to stretch fewer resources over a longer retirement.”


She emphasized the importance of creating spaces where women feel comfortable discussing financial matters, whether through her HerMoney podcast, financial wellness programs, or online communities.


The State of Retirement Savings: Encouraging News


One of the highlights of our conversation was the recent Real Life Retirement Journey study conducted by Principal Financial Group. Unlike the usual gloomy headlines about Americans being unprepared for retirement, the study found that middle-income households—those earning between $50,000 and $100,000 annually—are actually doing quite well.


“Nearly 80% of middle-income earners are saving close to 8% of what they earn,” Jean noted. “And that’s before employer matches.”


While financial advisors like myself often recommend a 15% savings rate, including employer contributions, the fact that many people are already close to this number is a positive sign. As Jean pointed out, automatic enrollment and contribution escalation in 401(k) plans have played a big role in making savings a more consistent habit for workers.


Younger Generations Are Ahead of the Curve


Another surprising takeaway from the study was how well Generation Z is doing when it comes to retirement savings. Unlike previous generations, many Gen Z workers are starting to save for retirement a full decade earlier than their parents and grandparents did.


“Gen Z is wiping the floor with everyone else when it comes to retirement savings,” Jean said. “They’re taking advantage of tools like automatic enrollment and are much more focused on long-term financial security.”


This is a significant shift, as younger generations seem to have learned from the financial mistakes of their predecessors. Seeing their parents struggle with financial uncertainty has likely motivated them to start saving early and take retirement planning seriously.


The Fear of Running Out of Money


A major concern for retirees is making sure they don’t outlive their savings. Jean and I discussed the psychological shift required when moving from saving for retirement to actually spending those savings.


“There’s a fear around taking money out,” Jean explained. “We’ve been conditioned to save, save, save, and then suddenly, in retirement, we’re expected to reverse-engineer the whole process.”


Many retirees hesitate to withdraw funds, even when they have more than enough. Jean highlighted research from financial experts David Blanchett and Michael Finke, which found that retirees with a pension—or another guaranteed source of income—tend to spend nearly twice as much as those relying solely on savings. The predictability of a monthly paycheck makes a significant difference in retirees’ willingness to spend.


Delaying Social Security: The Best Retirement Decision You Can Make


One of the biggest takeaways from our discussion was the importance of waiting to claim Social Security benefits.


“Delaying Social Security is one of the smartest financial moves you can make,” Jean said. “For every year you wait beyond full retirement age, your benefit increases by about 8%—and that’s a guaranteed return you won’t find anywhere else.”


She also pointed out that many retirees who are unsure about their financial situation could benefit from working a little longer. Whether it’s full-time or part-time work, extending your career by just a few years can provide additional financial security and reduce the number of years you’ll need to rely solely on savings.


The Rise of Phased Retirement


For those who aren’t ready to stop working completely, phased retirement is becoming an increasingly popular option. Many retirees are choosing to work part-time or pursue passion projects rather than making a sudden transition to full retirement.


“Working in some capacity keeps you engaged, helps with financial security, and provides a sense of purpose,” Jean said. “It also allows retirees to delay claiming Social Security, which ultimately increases their benefit.”


Final Thoughts


Retirement is changing, and the news isn’t all bad. Middle-income earners are saving at higher rates, younger generations are getting a head start, and strategies like delayed Social Security and phased retirement are making retirement more sustainable for many.


As Jean put it, “The time to stop working is when you have enough or when you’ve had enough.”


If you’re preparing for retirement, the key takeaways are clear: start saving as early as possible, take advantage of employer matches, consider delaying Social Security, and think about phased retirement as an option. With the right planning and mindset, retirement can be everything you envision—and maybe even better.


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