5 Ways Gen Z Is Approaching Retirement Better Than Boomers
Written by
Laura Beck
Edited by
Levi Leidy
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You might not know it from looking at some of the news, but Generation Z is making waves with their approach to retirement planning. Born between the late 1990s and early 2010s, this tech-savvy and socially conscious generation is setting new standards for financial preparedness.
GOBankingRates spoke to financial experts to learn the five ways Gen Z is outpacing their baby boomer predecessors when it comes to securing their financial future.
Early Start on Retirement Savings
One of the most significant advantages Gen Z has over boomers is their early entry into retirement planning. Brandy Burch, CEO at Benefitbay, shared, “Gen Z is shaking things up when it comes to retirement planning, and they’re doing a lot right. First off, they’re getting a head start — many are already saving and investing in their early 20s, which is a huge advantage thanks to the magic of compound growth.”
Tyler Meyer, CFP® and founder of Retire To Abundance, agreed: “Unlike boomers, many of whom started investing for retirement later in life, Gen Z is beginning to contribute to retirement accounts in their early 20s. This early start allows them to take full advantage of compound interest, potentially leading to a more substantial retirement fund.”
Embracing Technology for Financial Management
Gen Z is tech savvy – and that’s a great thing when it comes to retirement planning.
“They’re tech wizards,” said Burch. “Gen Z uses apps and online platforms to manage their finances, track spending and invest. Robo-advisors and investment apps make it easy and cheap to get started with investing, which is great for young folks just diving in.”
Meyer added, “Gen Z is leveraging technology to manage their finances better. With an array of budgeting apps, investment platforms and financial planning tools, they seem to be more informed and proactive about their financial health compared to boomers.”
Focus on Financial Education
Unlike many boomers who may have relied more heavily on financial advisors or learned through trial and error, Gen Z is actively seeking out financial education. That’s a good thing.
“Financial education is a big priority for them, too,” said Burch. “They’re soaking up all the personal finance knowledge they can from YouTube, online courses and blogs. This savvy approach helps them avoid mistakes and make smarter financial decisions.”
Ethical and Sustainable Investing
Gen Z’s approach to investing goes beyond just profit — they want to their investments to go hand-in-hand with their values.
“What’s really interesting is their focus on ethical investing,” shared Burch. “They want their money to support companies that align with their values, like those focused on sustainability and social responsibility.”
Ethical investing not only reflects Gen Z’s commitment to social responsibility, but it also sends a message to companies that they should care about these things, too.
Holistic Approach to Retirement Planning
Gen Z appears to be taking a more comprehensive view of retirement planning, considering factors beyond just financial savings. “Gen Z is also more health-conscious, understanding that maintaining good health can significantly impact their financial stability in retirement,” said Meyer. “They are more likely to invest in health and wellness programs, which can lead to lower medical expenses and a higher quality of life in their retirement years.”
This holistic approach — considering both financial and physical well-being — sets Gen Z apart in their retirement planning strategy. By investing in their health now, they could be reducing future healthcare costs and (bonus!) improving their quality of life in retirement.
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