Gen Z's Smart Money Moves: Outsaving Older Generations

Nearly Half of Gen Z Workers on Track for Retirement

A recent study reveals that nearly half of Gen Z workers are on track for retirement, outpacing baby boomers, Gen X, and millennials. This surprising finding challenges the common belief that younger generations are financially unprepared.

The Secret to Gen Z's Success

The key to Gen Z's financial success isn't side gigs or viral social media deals. Instead, it's the power of defined contribution (DC) retirement plans. These plans, which include contributions from both workers and employers, offer significant long-term benefits.

Workers with access to DC plans are twice as likely to meet their retirement goals, according to the study.

Wealth Accumulation: A Stark Contrast

The data highlights a significant difference in wealth accumulation:

• With a DC plan: Median worker had $83,000 in non-housing net wealth, 1.3 times their income.
• Without a DC plan: Median worker had only $13,000, just 0.4 times their income.

This underscores the importance of early and consistent savings.

Gen Z's Financial Savvy

Despite carrying more debt than previous generations, Gen Z is proving to be financially savvy. Their ability to leverage retirement plans effectively is setting them up for a more secure future.

Universal Access to DC Plans Could Double Retirement Readiness

The study suggests that universal access to DC plans could significantly boost retirement readiness. For Gen Z, this could double the current share of workers on track for retirement.

This finding emphasizes the need for broader access to such financial tools.