New technologies and policy changes are positioning Generation Z to start saving for retirement earlier than the previous generation, The New York Times reported June 28.
Gen Zers — those born between 1997 and 2012 — are contributing to 401(k) plans more often than millennials did when they entered the workforce, with 20% of the generation saving for retirement, according to 2023 and 2024 reports from Vanguard and TIAA, respectively, cited by the Times.
In 2007, 31% of 23-year-olds owned stock. That number rose to 39% in 2022, a senior researcher at the Federal Reserve Bank of St. Louis told the Times.
Gender trends are also shifting. The TIAA report found that 54% of Gen Z women were using 401(k) accounts to save for retirement, compared to 44% of Gen Z men — a reversal of the historic gender gap in retirement savings, according to the Times.
One possible reason is a provision in the Secure 2.0 Act, which requires eligible employees to be automatically enrolled in 401(k) and 403(b) plans and allows for gradual contribution increases.
Technology is another factor. Gen Zers have shown an interest in personal finance podcasts and budgeting apps. They have made up 64% of new users on investing app Acorns since 2020, a company spokesperson told the Times.
Finances are top of mind for Gen Z. In a March survey of recent or upcoming college graduates, 44% said they would exit a job interview process if the salary range was not disclosed, and 62% said salary was the most important factor when evaluating a job offer.
