Gen Z's Retirement Strategy Is 10 Years Ahead of Boomers' — Why It Matters
Gen Z may get a lot of flak for their approach to money, but when it comes to retirement planning, they're getting a much earlier start than previous generations. A new Bank of America report found Gen Z is starting to save for retirement at an average age of 24 — a full decade earlier than boomers did.
Here's why Gen Z is getting a head start, what advantages it can create and what older Americans can do if they started saving later.
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Why Gen Z Is Starting To Save for Retirement Earlier
Several factors appear to be helping Gen Z begin investing for retirement sooner than earlier generations.
"From a plan administration perspective, many employers have adopted auto-enroll or auto-increase features in their 401(k) [plans], meaning many Gen Z employees are enrolled in contributions from the start of their career," said Stacy Bucchere, managing director and head of workplace benefits client management at Bank of America.
At the same time, financial information is easier to access than ever before. The report found 63% of Gen Z and millennial employees get their financial news from social media, giving younger workers exposure to retirement and investing discussions much earlier in life.
"Another factor could be improved awareness around the importance of savings thanks to increased access to financial literacy resources online," Bucchere said.
How Saving at 24 Can Boost Long-Term Retirement Wealth
Gen Z's head start is benefiting them in numerous ways. The biggest advantage is time.
A Bank of America report found half of employees (49%) wish they had started saving for retirement younger, and research also showed young generations are more likely to wish they took full advantage of their employer's 401(k) match.
"Starting early and maxing out a match means more compound interest over time, resulting in more savings in retirement," Bucchere said.
Younger workers may also have greater flexibility to save.
"Younger employees often have fewer expenses when they begin saving," Bucchere said. "While older employees may be facing costs of childcare, paying off a mortgage or caregiving for aging parents, younger employees may be able to set more money aside for retirement each month."
Why Early Retirement Saving Leads to Greater Confidence
Getting an earlier start can also shape how people feel about their financial future. The report found 73% of Gen Z feel confident their savings are on track — up six percentage points from 2025.
"Saving for retirement earlier means employees have more time to meet their retirement savings goals and build a nest egg," Bucchere said. "It also means more opportunities to hit other goals along the way, like paying down debt or increasing healthcare savings."
Starting sooner can provide more flexibility to navigate financial setbacks, pursue other goals and make adjustments along the way, all of which may contribute to higher levels of retirement confidence.
How Older Workers Can Strengthen Retirement Savings
While starting early offers clear advantages, financial experts stress that it's never too late to improve your retirement outlook.
"Boomers should continue contributing to and maxing out their 401(k) up until the finish line to ensure they are reaping the benefits of exponential growth," Bucchere said. "Another option to explore if you’re over 50 is catch-up contributions. You may be able to make an additional catch-up contribution to ensure you’re getting the most out of your 401(k)."
While Gen Z's 10-year head start may give them an advantage, older workers still have opportunities to boost retirement savings and strengthen their financial future.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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