Gen Z is not banking on an early retirement — or even a traditional one.
More than a third of Gen Zers, or people who were born between 1997 and 2012, say the standard retirement age of 65 no longer feels relevant in today’s economy, according to a new survey from insurance company Nationwide. Nearly half (48%) say they plan to work beyond that age, with many pointing to the flexibility of remote work as a reason they can stay in the workforce past 65.
“With recent market volatility, it’s not surprising that Gen Z savers are somewhat pessimistic about their financial futures,” Kristi Martin Rodriguez, leader of the Nationwide Retirement Institute, said in a news release. “For these young people, retirement may seem like a lifetime away and feel like a very steep mountain to climb.”
Those long-term doubts are rooted in immediate financial pressures that can chip away at Gen Z’s ability to save. Four in 10 say they’re worried about affording their monthly bills over the next year, while 46% cite paying down debt — including student loans, credit cards and other obligations — as a top financial priority.
While the burden of high-interest debt is stalling long-term planning for some Gen Zers, others are using it as motivation to make moves now. The Nationwide poll found 17% admit to spending more on non-essentials because they believe retirement may never be attainable.
The result is a generation that feels financially stretched in the short term and uncertain about the long term — a mindset that could shape how they approach work, savings and retirement planning for decades to come.
Gen Z isn’t the only age group clocking in longer. Other surveys have shown that older Americans are also pushing back their retirement timelines — many into their 70s — as they grapple with how rising costs will affect their savings for retirement.
But young workers’ approach to retirement is proving distinct. Just as Gen Z tends to stray from financial norms, they’re fond of taking advantage of less-traditional money tools to save their cash. (Case in point: Gen Z is four times more likely to have cryptocurrencies than a retirement account.) These tools often lack the stability or long-term growth potential of more time-tested strategies — especially when it comes to retirement planning.
“As a mother of two Gen Z daughters, I’ve been stressing the importance of beginning to save right away so they can leverage their most powerful advantage: a long-term horizon that allows them to maximize the power of compounding interest,” Rodriguez said.
More from Money:
There’s a Huge Step Toward Retirement Nearly 90% of Americans Are Skipping
Americans’ ‘Magic Number’ for a Comfortable Retirement Has Dropped $200K
This 401(k) Change Could Help You Afford Retirement
According to The Money.com, we thoroughly research all the brands listed on our website and may receive a fee from our partners. Our research and financial considerations may influence how these brands are displayed. It is important to note that not all brands are included in our research. To learn more about our process, please visit our website.
A recent survey conducted by insurance company Nationwide revealed that Gen Z, or individuals born between 1997 and 2012, are not counting on an early or traditional retirement. More than a third of Gen Zers believe that the standard retirement age of 65 is no longer relevant in today’s economy. In fact, almost half of them (48%) plan to work beyond the age of 65, citing the flexibility of remote work as a reason for being able to stay in the workforce.
Kristi Martin Rodriguez, leader of the Nationwide Retirement Institute, stated in a news release that “with recent market volatility, it’s not surprising that Gen Z savers are somewhat pessimistic about their financial futures.” She also added that for these young individuals, retirement may seem like a distant goal and a difficult one to achieve.
The survey found that Gen Z’s doubts about their long-term financial future are influenced by immediate financial pressures. Four in 10 are worried about being able to afford their monthly bills in the next year, while 46% prioritize paying off debt, including student loans, credit cards, and other obligations.
While high-interest debt is hindering long-term planning for some Gen Zers, others are using it as motivation to take action now. The survey revealed that 17% of Gen Zers are spending more on non-essentials because they believe retirement may never be attainable.
This generation is facing financial strain in the short term and uncertainty about the long term, which could shape their approach to work, savings, and retirement planning for years to come. However, Gen Z is not the only age group pushing back their retirement timelines. Older Americans are also delaying retirement, with many planning to work into their 70s due to rising costs and concerns about their retirement savings.
What sets Gen Z apart is their unique approach to retirement planning. They tend to stray from traditional financial norms and are more likely to use non-traditional tools to save money. For example, Gen Z is four times more likely to have cryptocurrencies than a retirement account. While these tools may offer some benefits, they often lack the stability and long-term growth potential of more traditional strategies, especially when it comes to retirement planning.
Rodriguez, who is also a mother of two Gen Z daughters, stresses the importance of starting to save early to take advantage of their most powerful asset: a long-term horizon that allows for the power of compounding interest. She believes that this mindset shift can help Gen Zers achieve a more secure financial future.
Source:Read More