Generation Z is currently the youngest adult generation in the U.S., with individuals aged 18 to 28 having a significant amount of time to consider their financial futures, including retirement. However, it seems that, for many, retirement planning isn’t at the top of their to-do lists just yet.
A report from Nerdwallet indicates that only 18% of Gen Z members contributed to retirement accounts in 2025. This could be due to various reasons — maybe it’s urgency, a lack of knowledge, or simply that they don’t have extra funds to invest right now.
Befuddling matters further, a separate survey suggests some Gen Z individuals don’t feel the need to save for retirement, while others express concern about the volatility of the U.S. stock market. If you find yourself in this boat, there are some crucial insights and tips that could help kickstart your saving journey.
Many Gen Zers Plan to Work Indefinitely
The retirement survey reveals that around 75% of Gen Z members intend to remain part of the workforce as much as possible. Sure, they might feel differently 30 to 40 years down the line—it’s hard to predict, right? Life can take unexpected turns, making it wise to prepare for situations where retirement might be necessary or desired, regardless of one’s age.
What Gen Zers Can Do: Change Your Mind and Set Goals
One of the most valuable things money can offer is the opportunity to change your future decisions. So, why not set a retirement target now, even if you’re unsure about retiring one day? It doesn’t have to be etched in stone; goals can evolve over time. Consider utilizing a calculator to figure out how much you’d need for retirement.
Imagining your future self can be tough. It’s easy to picture a version of yourself that’s a reflection of today, but life inevitably changes. You might face challenges like a medical issue or the responsibility of caring for family members. Or maybe, you might just not want to keep working in 30 or 40 years. Not preparing now could limit your life choices later.
Do Not Rely Solely on Social Security
As you think about retirement, it’s essential to understand how much you can expect from Social Security. Many believe it will be adequate; however, a surprising 43% of Gen Z thinks that Social Security alone will provide sufficient retirement income. Truth be told, it typically covers only about 40% of your pre-retirement income, and that could change.
In June 2025, the average monthly Social Security benefit was about $2,005. It’s worth noting that by the time today’s Gen Zers retire, that amount might dwindle, affected by factors like inflation. A report projects that Social Security funds may be depleted by 2034, reducing benefits significantly.
Simply put, relying on Social Security could be risky for future financial security; it’s wise to put away savings as if those benefits might be diminished later.
What Gen Zers Can Do: Start Saving Now
Retirement may not feel urgent in your 20s, but early preparation is crucial. Ideally, Social Security should supplement your savings when it comes time to retire. However, your current age gives you a fantastic advantage in planning ahead.
Let’s say you aim to have $1.5 million saved up by age 65. That figure might seem daunting, but the majority of that amount will likely come from investment growth in the stock market. Based on historical market trends, an estimated annual return of around 7% (factoring in inflation) could be reasonable.
If you delay saving until you’re 35, you’d need to contribute about $1,280 each month for 30 years. However, starting now could reduce that monthly amount to just $604 for 40 years. Waiting means you could miss out on substantial benefits.
Granted, saving hundreds each month can feel overwhelming — but starting with even a small amount can pave the way for a healthier financial future. Your situation can change drastically over four decades, so begin saving something now, whether it’s contributing to a 401(k) or a Roth IRA when finances allow.
Some Gen Zers Are Hesitant About the Stock Market
For around 30% of Gen Z who own retirement accounts, the past year’s market volatility has left them feeling less confident about investing. It’s completely normal to experience anxiety with market dips, yet it’s worth noting that historical patterns show the market tends to recover over time. Past downturns don’t necessarily predict future outcomes, but they can offer some assurance that things might bounce back.
The real issue is that opting out of the market altogether due to fear can be just as risky. If you consider the earlier example of saving $604 a month for 40 years with a 7% return, that could lead to around $1.5 million — quite a difference compared to what you’d get with a mere 4% return in a typical savings account.
What Gen Zers Can Do: Diversify and Trust the Process
So, how can you invest without feeling like you’re rolling the dice? Focus on diversifying your portfolio. This simply means spreading out your investments to mitigate risks — if one area dips, others might hold steady.
Using low-cost index funds is a great way to achieve diversification easily. These funds follow market indices, like the S&P 500, which includes 500 major U.S. companies. There are various funds available that cover different sizes and sectors, allowing you to further bolster your portfolio.
While pressing financial responsibilities—like student loans or everyday bills—can distract from long-term goals such as retirement savings, remember that even small, consistent contributions can make a significant impact over time.
