Key Takeaways
\nGen Z workers have an average 401(k) balance of $13,500, with a 7.2% employee contribution rate that climbs to 10.9% when employer matches are included.Gen Z started working with financial advisors at an average age of 23, earlier than any previous generation.Despite having the smallest balances, 63% of Gen Z workers say they’re confident they’ll be financially prepared for retirement\u2014higher than any other generation.<\/p>\n
It’s perhaps a timeless pattern that older generations depict the young as reckless with money, less eager to work, and maybe even a worrisome sign of the future. Any such stereotypes need a major update with Gen Z (ages 13 to 28 in 2025), who are saving for retirement earlier than previous generations<\/a> and seeking advice from financial planners far sooner.\n<\/p>\n According to Northwestern Mutual, Gen Zers who have financial advisors start working with them at an average age of 23, more than two decades earlier than baby boomers<\/a>.\n<\/p>\n So though Gen Z’s average 401(k) balance<\/a> is the lowest of any generation, that’s more a function of age than generational apathy. Many Gen Zers who are saving for retirement are just a few years into full-time work.\n<\/p>\n<\/p>\n Starting Small But Starting Early <\/p>\n Gen Z’s $13,500 401(k) average covers a wide spectrum, from college students to those already ascending the corporate ladder. Vanguard’s data shows workers under 25 averaging just $6,899 in their 401(k) accounts, with a median<\/a> of $1,948. Data from the Transamerica Center for Retirement Studies shows that those in Gen Z who already have a middle-class income have a median retirement savings of $43,000.\n<\/p>\n If your balance is close to these figures, don’t be alarmed: that’s expected since you’re likely still in school, working part-time, or in the first years of your first full-time job. You can still start building a foundation of retirement savings<\/a> earlier than previous generations.\n<\/p>\n<\/p>\n Why Saving Earlier Matters <\/p>\n Time rewards those who start early. A 20-year-old investing $300 per month at a 7% return would accumulate $1.03 million by age 65. Wait until 30, and the required monthly contribution jumps to about $620. Start at 40, and it’s about $1,360. The longer you wait, the steeper the climb.\n<\/p>\n Many in Gen Z, despite the turbulent economy of recent years, are saving accordingly.\n<\/p>\n Important<\/p>\n The typical Gen Zer who works with a financial planner started doing so at an average age of 23, according to Northwestern Mutual.<\/p>\n<\/p>\n If you’re in Gen Z and you don’t even have a 401(k) yet, that’s okay. If your employer doesn’t offer one, you can open an IRA<\/a> and automate a monthly contribution<\/a>, even if you can only afford just a modest amount each month. The habit matters more than the monthly figure right now.\n<\/p>\n