Younger Americans are already thinking about retirement and saving up ahead of schedule, according to Robinhood cofounder and CEO Vlad Tenev.
“When I was graduating from college in 2008, I wasn’t really thinking about retirement that much. Retirement seemed really, really far away.” Tenev told Jack Altman, brother of OpenAI CEO Sam Altman, during a recent podcast appearance.
“Now Gen Z is opening retirement accounts at 19 years old, so they’re thinking a little bit more conservatively, I think, than prior generations.”
Why It Matters
Tenev attributed the shift to increasing financial literacy and forward-thinking among Gen Z. However, surveys show that many younger Americans are concerned that a financially secure retirement is becoming increasingly out of reach, driven in part by rising debts and precarity in the job market.
What To Know
According to a 2024 survey from retirement planning services provider TIAA, around one in five Gen Z-ers are saving for retirement. A separate study released in October found that the majority of all Americans now view a traditional retirement between the ages of 65 and 70 as “unattainable.”
Meanwhile, Western & Southern Financial Group found earlier this year that nearly half Americans (49 percent) lack confidence in their ability to ever retire comfortably. Many are considering retiring abroad to address the financial pressures behind this skepticism, the study revealed. They were led by Gen Z, 40 percent of whom said they were open to moving to another country for retirement.
But beyond economic challenges facing Americans of all ages, however, these data may also reflect the differing retirement preferences of Gen Z and the increased emphasis placed on achieving financial freedom as early as possible. According to a report from Manulife John Hancock, Gen Z considers the ideal retirement age to be 59, well below millennials (61), Gen X (64) and baby boomers (67).
What People Are Saying
Financial planner and consultant Ryan Viktorin told the New York Times in June: “Gen Z in general, and in particular women, are starting to get an understanding that the more that you save and invest, the more agency and freedom you have over your life.”
What Happens Next
In line with Tenev’s comments on increased financial awareness, investment firm Vanguard recently revealed that “workers in the Generation Z and millennial cohorts are on track to be better prepared for retirement than those in older generations.”
Some 47 percent of workers aged 24 to 28, alongside 42 percent of millennials, are expected to “maintain their current standard of living in retirement” thanks to increased defined contribution plan access and “stronger retirement plan design.” This compares to only 41 percent of Gen X and 40 percent of baby boomers in Vanguard’s study.