Gen Z Americans — the first digitally native generation — are still years away from retirement. But contrary to popular belief, they are 32% more likely to invest in their workplace retirement plan than their older colleagues were at the same age, according to a report by Vanguard.
And what’s more, these Americans are the most optimistic about retirement, with 51.4% saying they are very confident about being financially secure when they retire, according to a recent Achieve survey.
But how this will translate into being financially successful hinges on several factors, including the current choppy economic landscape and how they will navigate it.
Tools On Their Side
Yet, thanks to social media, they have tools on their side, including access to more personal financial education.
Bri Conn, co-host of the Childfree Wealth Podcast and investment advisor representative of Childfree Wealth, said that with the rise of social media and personal finance education, Gen Zers can be a financially successful generation despite the current economic climate.
“For some, building financial stability is about gaining freedom and flexibility with their time. Others want to help older family members. While it will take work, I do see many Gen Z individuals engaged in the process,” said Conn.
Conn also mentioned that this generation is better equipped with technology than previous generations. For instance, opening an IRA can be done in minutes from your phone.
“Meanwhile, prior generations often had to visit a financial professional, which can create stress and anxiety that causes people to wait years before reaching out for help,” said Conn. “Despite all the challenges Gen Z faces, I’m proud of them for asking questions and putting in the work to create financial independence.”
A Delicate Balance
As Dominic James Murray, CEO of CJ Finance and independent financial adviser, explained, Gen Z is dancing “a delicate financial tango,” balancing precocious investment moves with the weighty realities of debt and living costs.
“Their path to financial success is as much about smart investing as it is about navigating the economic challenges unique to their time,” added Murray. “It’s a real rollercoaster for Gen Z in the financial world right now. On one hand, they’re setting the pace by investing in retirement earlier than any generation before them. That’s a smart move, no doubt. But let’s not gloss over the hurdles they’re facing.”
For instance, Murray noted that this generation is grappling with a high cost of living and salaries that often need to stretch farther.
“With a median salary of around $33,800 and a significant chunk of living paycheck to paycheck, it’s no walk in the park,” he said, adding that there is also debt- such as student loans, which are a heavier burden for them than for any previous generation.
“Inflation’s only making things tougher, squeezing their ability to save and invest,” he said.
Yet, he also noted that Gen Zers are resourceful and are not just sitting back.
“They’re out there hustling, looking for ways to turn their passions into profits, considering job changes, and even juggling multiple gigs,” he said, adding that this shows remarkable resilience and a fresh approach to money management that’s all about diversification and adaptability.
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