Gen Z: What Retirement Would Look Like if You Began Investing $100 a Week Today

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Retirement can feel impossibly far away when you’re in your 20s, but the financial decisions Gen Z makes right now matter more than they may realize. Small steady contributions can grow into life-changing wealth thanks to time, consistency and the power of compounding.

What $100 a Week Can Grow Into by Retirement

Even modest weekly contributions can turn into significant wealth when given decades to compound, according to Melanie Musson, a finance expert with Clearsurance.com. Even conservatively speaking, she said, if Gen Z adults started investing $100 a week today and didn’t increase their contributions at all, “they would have around $1 million by the time they retire.”

Robert R. Johnson, certified financial analyst and professor of finance at Creighton University, said that with a “well-diversified, common stock portfolio,” Gen Z could actually earn well over $3 million. “That is the power of compound interest.”

Why Starting in Your 20s Makes an Extraordinary Difference

Starting early is the single most powerful advantage Gen Z has in hand. Gen Zers have a lot of time “to double [profits] again and again,” Musson said. Compound interest makes a big difference in growing savings, but it takes time to see its effects.

Paul Walker, financial consultant and author of “A Money Book Anyone Can Read,” added that the first stretch of savings always takes the longest.

“The next milestone arrives much faster,” he said, “and the one after that faster still. Your money begins working harder than you do.”

Choose Realistic Return Assumptions

Experts recommend that Gen Z plan by using conservative return estimates but also take more risks while they are young, with their longer time horizons. Breanna Seech, senior wealth advisor at Mariner Wealth Advisors, noted that young investors “tend to be quite risk-tolerant,” though they’ll benefit the most from staying invested over time rather than chasing hyped investments.

Musson suggested planning for a 7% rate of return, but Johnson said that history shows 8% and above is not uncommon, so long as young investors stay committed.

“It’s important to respect the value that diversification brings over long periods of time,” Seech said.

The Best Accounts for Growing Weekly Contributions

A $100-per-week habit grows fastest when funneled into tax-advantaged accounts first, like a 401(k) plan or Roth IRA, Johnson said, then supplemented by taxable investments. “The deposits grow tax-free until retirement, a huge benefit,” he said.

Seech also likes passive investments for young investors, “such as indexed ETFs rather than focusing on picking a winning stock.”

Avoiding the Most Common Early-Investor Mistakes

Lots of small mistakes can create long-term problems, the experts cautioned. Musson said that just missing a month of investing with the idea that you’ll catch up later is “a dangerous mindset,” and it’s smarter to keep a steady $100-a-week contribution instead. For young investors, Johnson said that taking “too little risk” is a big mistake. And Walker underscored this by saying, “It’s far better to save a little now than to hope you can save a lot later.”

Balancing $100 a Week With Other Financial Priorities

Gen Z typically juggles high living costs and debt. Experts say the key is not losing sight of retirement savings, especially when employer matching is available, while still keeping emergency funds and debt repayment in the picture.

While it’s hard for young investors to hold retirement close in mind, “Saving for your retirement is more important than saving for a down payment,” Musson said.

Johnson noted that many young people assume that if they haven’t accumulated enough money by retirement age, they will just continue working. Yet, he pointed out, “The option to continue working may not be there.”

How To Stay Consistent for Decades

Building a retirement foundation in your 20s is easier when investments are automated, diversified and visualized over time, Musson said. Seeing money double can motivate younger investors to stay disciplined. “You can have money automatically go from your paycheck to your investments in many cases,” she said.

If Gen Z can commit to small, steady steps now, time and consistency will do the heavy lifting, and their future selves will reap the rewards.

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