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In this clip from the latest episode of Decoding Retirement, BlackRock senior advisor on retirement Anne Ackerley joins host Robert Powell to discuss the importance of financial planning for millennials, Gen Z, and advice for younger generations to start planning for retirement today.

"When I entered the workforce, there was no 401(k) plan. They were really just IRAs. But as my children enter the workforce, it's almost impossible for them not to enroll in their 401(k). They're automatically enrolled and they're automatically put into a qualified default investment alternative, typically a target date fund," Powell explains. "So sometimes I think for the younger workers who are entering the workforce, the crisis isn't as great because they're starting to save right from the get go."

Target-date fund (decoded)

A target date fund is a type of mutual fund designed to simplify retirement investing by automatically adjusting its asset mix over time. It gradually shifts from a more aggressive investment strategy (focused on growth) to a more conservative one (focused on income and preservation of capital) as the fund approaches its target date, which usually aligns with the investor's expected retirement year.

"We do a survey every year, it's called Read on Retirement. This is our ninth year of doing it, and we go out and talk to about 4,000 people," Ackerley says. "What we've heard on income is that 60% of everybody we've talked to is afraid of outliving their savings. So yes, actually Gen Z were the most afraid, which is kind of interesting. But maybe that's because they're going to live the longest. But every generation is very, very worried about this."

Retirement planning doesn’t mean locking up your money for a rainy day and forgetting about it. Planning your future means reacting to events today. Decoding Retirement gives you the tools to navigate the years ahead, and take action now!

Yahoo Finance's Decoding Retirement is hosted by Robert Powell, and produced by Zach Faulds.

Find more episodes of Decoding Retirement at https://www.perfectloveletters.com/videos/series/decoding-retirement.

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Editor's note: This post was written by Zach Faulds.