By tf-lawyer.com A recent FOX 11 report highlights a concerning trend among Gen Z adults, born between 1997 and 2012. The report reveals that only 20% of this generation plans to save for retirement, with many expressing that they don’t intend to retire in the traditional sense.
According to the latest findings from the TIAA Institute and UTA’s NextGen Practice, a significant portion of Gen Z adults under 27 expects they will not retire at all. More startlingly, just 20% of working-age Gen Z respondents reported having a savings plan for retirement.
For a generation projected to live into their 100s, it’s crucial to have a financial plan in place. However, high living costs are severely impacting their ability to save. The research indicates that nearly one-third of Gen Z (29%) depend solely on their wages for survival, with most of their earnings going toward basic necessities. This financial strain is making it increasingly difficult for them to achieve milestones such as homeownership and savings.
Surya Kolluri, director of the TIAA Institute, pointed out that 36% of respondents attributed their reluctance to save for retirement to high debt and low income. Furthermore, Gen Z is spending more on essentials compared to previous generations and is more affected by inflation, with their annual inflation rate exceeding that of other generations by half a percentage point this year.
Despite these challenges, Kolluri noted some positive aspects in the data. For instance, while only one-fifth of respondents are saving for the future, 66% of those are doing so through a 401(k) plan. This indicates that Gen Z at least recognizes the importance of saving, with 84% stating they save a portion of their income each month (even if it’s not specifically for retirement) and 57% indicating they maintain a budget.
Additionally, Kolluri highlighted that 52% of Gen Z reported putting their savings into standard savings accounts, as they prioritize liquidity and current financial freedom. “Gen Z doesn’t see retirement savings as a means of ensuring their financial freedom later in life. The concept of ‘freedom’ is very significant to them; they desire flexibility in how they save and manage their finances,” he explained.
