Brynnley Beckman, a 23-year-old biology teacher in Dallas, is already thinking about retirement. She contributes 3 percent of her salary to an employer-sponsored retirement fund and hopes to increase her contribution by 1 percent each year. “I wanted to start saving early because the more the money sits, the more it compounds, the more it’s going to grow,” Ms.
Beckman said. Many of her peers in Generation Z, defined roughly as people born from 1996 to 2012, are also motivated to save. A 2024 report from Vanguard shows that Gen Z members are contributing to 401(k) plans at higher rates than millennials did when they first entered the workforce.
Ryan Viktorin, a certified financial planner and financial consultant at Fidelity Investments, said, “Gen Z in general, and in particular women, are starting to get an understanding that the more you save and invest, the more agency and freedom you have over your life.”
Financial independence later in life is Ms. Beckman’s main motivation for putting money into a 403(b) plan, which is similar to a 401(k) but typically offered by public schools, nonprofits, and religious institutions.
Gen Z drives retirement savings trend
“I could retire at the age that I want to, rather than working later, and have financial freedom and security,” she said. Financial experts credit Gen Z’s ability to save more at a younger age to policy changes and technological advancements, which have made financial planning more accessible and understandable. Reports indicate that 20 percent of Gen Z-ers are saving for retirement, a notable increase compared to the early savings habits of millennials when they first entered the job market.
The improvements in savings can also be attributed to increased financial education and awareness. Digital tools, financial apps, and readily available financial advice have made it easier for young people to understand and engage in their financial futures. The trend is encouraging, as it suggests a future generation that is not only financially literate but also prepared for the long-term economic challenges.
As Gen Z continues to mature, their early start in saving and investing could serve as a stabilizing force in the economy, ensuring greater financial security for themselves and potentially influencing the savings habits of future generations. The forward-thinking mindset of Gen Z when it comes to retirement savings is reshaping expectations and setting a new standard for financial well-being.
