Back > Age Based Info  > Gen Z Approach to Retirement

Gen Z Approach to Retirement

Every generation has different ideas and expectations when it comes to work and retirement.

Generation Z or simply Gen Z (born between 1997-2012) are more financially sophisticated than earlier generations were at their age.

They’re also more inclined to save for retirement than other generations were at the same age.

Here are some findings about Gen Z that will affect how they plan for retirement.

  1. Gen Z Are Saving Early

Members of Generation Z started saving for retirement at the ripe age of 19—the youngest starting point of any preceding generation.

One possible reason for Gen Z’s saving early could be the fact that most grew up in households where no one was counting on traditional pensions.

People had already switched from defined benefit plans to defined contribution plans. There was a need to save for retirement, and the message was, “You need to start saving early because you’re on your own.”

  1. Financial Independence, Retire Early (FIRE)

This movement is popular with Gen Zers who are exhausted from high-pressure jobs and don’t see themselves emotionally and behaviorally connected to their jobs.

FIRE is defined by frugality and extreme savings and investment aimed at helping people to retire early.

According to a Goldman Sachs survey, a quarter of Gen Zers plans to retire before age 55 into an active lifestyle that includes traveling, pursuing hobbies, and spending time with family.

Gen Zers are interrogative of traditional approaches to both work and retirement. To make their dream a reality, Gen Zers tend to be more flexible and change jobs every 2-3 years. Switching jobs frequently often results in greater income jumps than sticking with one employer for decades.

  1. Gen Z Are More Prepared for Retirement

Despite the overall confidence in being on track for retirement being lower than it was one year ago because of market volatility and inflation, Gen Z has the biggest share of savers who feel like they are getting it right.

The average retirement-savings rate among older generations (baby boomers, Gen X, and millennials) is 12 percent of income, compared with 14 percent among Gen Zers.

The higher savings rate could be because this generation witnessed the devastation their parents underwent due to the Great Recession of 2007-09. This period was marked by investment losses, job losses, and home foreclosures.

Gen Zers want to avoid such financial challenges down the road.

  1. Gen Zers Want More Than A 401 (K) For Retirement Savings

When it comes to retirement savings, Gen Zers do not want to just “set it and forget it.”

“This generation is more proactive in their long-term savings, engaging in various investment strategies to see what works,” says Darren Nomberg, Senior Vice President of investments for David Lerner Associates.

According to the annual 401(k) retirement survey by Schwab Retirement Plan Services, while 401(k)s remain the primary retirement savings tool for American employees, Gen Z is more likely to also invest in:

  • Cryptocurrencies,
  • Annuities,
  • Real estate,
  • ESG products and
  • Small businesses than older generations

Schwab found that 70 percent of younger employees want to feel that their investment options correspond to their personal needs and values.


Gen Z may get an undeserved rap that they are principally living in the present, but we can see from statistics that retirement is a top long-term goal they’re trying to reach.

Over the past few years, this generation has stepped up and is more engaged with their finances.


Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc.

This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable— we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual’s personal circumstances.

Member FINRA & SIPC.

Skip to content