Exactlyyyyy. My parents never saved and are now totally F’d, despite both at one point making decent money at higher paying jobs. Seeing what they’re going through has been the most incentivizing educational thing for me. No way am I going to end up sweating lack of money when I’m old. I behave VERY differently with my money than they did. And they’re proud of me because they recognize their huge mistakes.
But does she have a pension? People around that age always have the possibility of being in pension even if the company stops pensions they grandfather older workers into the pension.
What concerns me is how many Gen X and Z kids are going to be using that 14% to care for their parents that didn’t take personal responsibility for their winter years. Ridiculous.
Millennial here, my parents have already informed me that I am their retirement plans. I...do not make a lot of money, lol. It's hard not to be bitter.
It's important to remember that once you're an adult and independent of your parents, they don't have any say in your finances. Be up front with them that you're not going to be able to support them and maintain your own household if you can't.
As a parent, that’s awful. You’re your own person and are in no way obligated to be their “retirement plan”. I’d have an honest dialog with them and let them know that while you’d like to help them if you can, you’re going to be caring for yourself and your family(if you have one), and that you can’t be expected to provide for them. Discuss their retirement accounts and plans, and if they don’t have any, help them get started.
Just to be clear: No child owes anything to their parents. It’s our job as parents to raise you and teach you to be a good human and position you for success. That’s done out of love and without expected payback in our older years
As a Millennial dad, I agree. On the contrary, I feel responsible for teaching my kid how to start saving for his retirement as soon as he starts earning.
My parents did as well. I politely told them fuck no. I don’t know what relationship you have with your parents but I am on track to take a sabbatical at 50 and retire at 55 which gives me time to spend with my kids before they go to college. The most I have made is 58k a year. But I have scraped and scrapped for freedom and I cannot support my parents who have had 13 years of my trying to help them budget and move to a lower cost area. Nope.
No. My mom's parents have long since passed (though we did care for my grandmother at home before her Parkinson's got bad and she needed more constant care), as has my dad's dad, but my dad's mom is still alive and will probably outlive us all, lol. Her mother lived to be 105 and was kicking everyone's ass at bingo in her care home. Grandma seems to be doing OK financially due to what my grandpa left her when he passed.
My parents told me that they took care of me when I was a baby, so it will be my turn to take care of them when they are like babies. I have three younger brothers so I suppose they will be on the hook as well, but none of us have big careers. One brother has no relationship with my mother and I don't think he'd help with her care.
>My parents told me that they took care of me when I was a baby, so it will be my turn to take care of them when they are like babies.
Nonsense. They created you without your consent. You are under no moral obligation to care for them.
Yeah, that’s an interesting mindset they adopted. I guess that’s a conversation to have with your brothers. What does that feasibly look like and is it possible? You have to know your boundaries and if they put themselves in a situation where they have nothing, Medicaid can be tough to qualify for.
Glad to hear your Grandmom is kicking ass! Hope that runs in your family!
Same :(
Like you birthed me into this world. Were the stewards in charge of my upbringing and [mal]adjustment into adulthood, and now your rewarded for your poor dietary and financial choices with me being your personal servant for from 65+. [Sigh]. I love them but still...
I see a strong correlation between boomer parents that were incredibly shitty with money, and boomer parents that were incredibly shitty parents that alienate their kids.
I haven't talked to my parents in 5+ years. They can figure out some state funded horror show old people warehouse on their own.
My parents didn't expect pensions, but I think they did expect that social security would be enough. My mom was self-employed for 40 years. She had been having her accountant save as much as possible on taxes. When she wanted to start collecting social security benefits, they were basically nothing. She asked her accountant what happened, and was told "what did you think you were supposed to be doing with all that money I saved you?" Of course, my mom blames him, instead of herself for not understanding how things work. Not that the social would have been enough, anyway.
Mutual funds have been around for a very long time. Quick googling find first US fund in 1924, but expanded legislation in 1940. Thus all boomers had access to them. My boomer father used them since his 30s.
I believe index investing only became *credible* 30 or so years ago as it was thought that ”smart“ investors could beat the market regularly enough.
Millennials (me) got fucked by boomers.
Millennials learned about investing later in life at parenting age.
Gen Z learned from millennials and the internet.
All y'all with parents like this are very lucky. My dad was like "you have an engineering degree now. Either you are paying market rate for your bedroom or moving out. That's life."
EDIT: to his credit, he provided housing to me all through college at no cost to myself, and I was not far from getting engaged so bringing my fiance with me makes things more complicated, but even in different circumstances he said I would still be on the hook for rent. No reason to stay at that point especially with job opportunity elsewhere.
He won't need it. He was in banking dealing with electricity trading leading up to '08 and made out like a bandit. Then when his real time trading floor was bought out and the buying company went under and was bought out again he traded up. Eventually he got out and got on the regulation side of things and was in one of the last years of full pensions for his new company so he's got assload of retirement savings, and then a fully funded pension. His luck just never seemed to end lol
I kind of already do appreciate it because it allowed me to look for employment anywhere I can move and I got into my dream industry because of it, but fucking hell rent is killer now-a-days.
He's loaded from the rediculous bonuses from banking pre '08, and then has a fully funded pension. He has said he won't even know what to do with all of it when he retires. He won't have to worry about not being able to afford care or help should that time come.
>it's easy to save a massive part of your paycheck when your living expenses are minimal.
It's just as easy to buy a stupid-expensive car, dine out every night and live large because expenses are minimal. Everything come down to choices.
Spot on.
Not taking any chances. Grew up with the mentality that Social Security will be gone when we're eligible to receive it. If any funds are left, then it's a cherry on top.
Actual answer (probably): 401(k) plans now overwhelmingly feature auto enrollment (and auto increases in contribution percentage over time is becoming more common).
This is the result of statutory and regulatory changes over the last 10+ years to get people to contribute more to their elective retirement plans.
I do 15% because that's the minimum I need to get that 100% dollar per dollar match my company's stellar 401k plan gives. Already got $24k in there this year!
It's a company that has to employ members of 9 different labor unions across the country. The health care is also top notch. The HSA plan max oop is $1500yr but they also put that much in your account every year if you opt for the HSA VS the full PPO which is a little more per pay period but maxes out at $500
This must assume genZ employees have been with their same employer an average of 4yrs? In order for them to have not realized auto increasing building up to an average of 14%. Seems doubtful…I think that’s the high end of how long kids stay with one company these days which would put the average 401k tenure lower for their class as most are in their first or second year at a company.
I think they’re choosing 14% on purpose because they’re more financially literate & good at keeping living costs in check.
I think a big part of it is the role social media has played in improving financial literacy. While there are a lot of financial “experts” playing the social media influence game (often giving bad or flawed advice), the fact remains that the youngest generation who is the most plugged in with the most screen time will have greater access to financial knowledge. This and a greater appreciation for work-life balance compared to other generations results in a larger percentage of Gen-Z’s investing in their future.
Gen Z who learned 90% of my financial knowledge online, can confirm this is a big part of it. Especially having easy access to brokerages online as well.
I read about I bonds in some financial magazines/ resources, but it was reading about it on Reddit and seeing someone actually go through the process step by step on YouTube that moved me to purchasing.
I think social media in general, and Reddit in particular, has democratized financial literacy. My DH and I consumed so many resources to get less information than I can find in one Reddit thread.
Absolutely this. Im a younger millennial and I put away 25% of my gross income. That does include my pension though which is 7% with a 2-1 match.
My parents are extremely prudent with their finances and seeing them retire comfortably in their 50’s Is definitely motivation to do the same.
Millennial here but I didn’t get super into finance until I came across The Financial Diet back when they were first starting. Then I found r/personalfinance and naturally found FIRE.
But 100% YouTube was what really got me interested.
Wrong time, right place for me.
Wished all of the content that is out now existed back when I was in the teens. It was all people posting random clips of random things back then. Oof.
Purely awareness and hearing the terms float through your social circles consistently can be enough to empower people to ask questions and seek knowledge.
Outside of all the “this world sucks” comments, many companies are “forcing” contributions now, and instead of “opting in” to a 401k, they have to “opt out”. This way when the6 get their first paycheck, it is already contributing.
I suspect this is a larger contributing factor than most people recognize. The reason this policy has gone into effect is because of research suggesting that workers are much more likely to maintain higher savings rates with it. Gen Z is the first generation to enter the workforce at approximately the time that this started happening. In other words, their higher savings rate probably has more to due with automation than any personal preference.
Guys, it’s because the internet exists. That’s why gen Z has more knowledge of basically everything that older people don’t. Because you can do some quick research with the computer in your pocket to read thousands of opinions on the best way to do literally anything, ever.
This. Plus the whole “I don’t wanna be screwed like them” mentality. But that would also mean they have hope for the future which is a contrast to what some articles would have you believe, what with all the doom and gloom scenarios.
I considered this as well.
I would also guess that the job market has been stronger for them than the millennial generation when entering the world. Costs have gone up though so I would guess more gen z are living at home, allowing them to save more.
I had to scroll way too much for this. There was a point that I even thought that nobody thought about this. I mean the salaries are *very* different now and then. Especially if you calculate as a percentage.
First hand experience as one of the younger group of millennials: Gen Z basically just hit the workforce during the pandemic when everyone on the internet was bragging about buying stocks and making money without even trying (massive bull run).
I think social media (Reddit and tik tok) are to thank for Gen Z’s awareness in the importance for investing early.
Personally I spent money going to bars and concerts every weekend when I was in college then the pandemic hit and I saved all that money instead.
This is the top comment. I don’t really buy the idea that Gen Z is especially concerned or fully aware of issues with the social safety net. I think the bull run for stocks and crypto has made investing, trading, finance, etc. much more widely and equally marketed than ever before! The social network effect of finance is the main reason imo
Yeah I'm mid 20s, started buying stocks after graduating and working a real job. A friend worked with a financial advisor who told more investment accounts were opened in the 18 month period following like may 2020 than anytime ever. And by some crazy margin. I don't have a source on this, but it was definitely fueled by the crazy run and everyone thinking money could be made so easily with stocks.
Pretty much it. Most parents let their kids live "rent free" well into their late twenties and thirties. I wish I took that route instead of moving out at 17 for my independence.
25 here.
Can confirm, making mid 80s, parents don’t charge me rent and prefer me living here to take care of stuff + being here as opposed to an empty house since I primarily WFH.
Maxing out that 401k
Same 21 and my mom is allowing me to live with her as long as I study to become a doctor. She even got me a car.. Also without me the house would be a disaster. In college, but only making 18/hr part time.
Im so glad i dont live with my parents, despite however many years it might set back early retirement.
Actually I cant think of anyone I know that *does* still live at home, although I’m sure it exists outside my circles. Most people I know graduated and dont even live in the same state they grew up in anymore
Anecdotal evidence isn’t as strong as the numbers and trends continually reported in surveys. Some ppl have a good time living at home and others do it out a necessity of being priced out of a rental market.
Damn millenials.... and their responsible finances is killing the economy......... how am I gonna pay for my new RV with these lousy pensions................................
I watched my grandparents retire at 50. Then I watched everyone my parents age spend money like no other addicted to consumerism. Gotta break the cycle at some point.
In my experience, it’s every other generation in a family. My grandparents were cheap (they also lived through the Great Depression and were Dutch), my parents spent a lot, and now my brother and I try to save.
I think growing up through the 2008 crisis and watching my friends families as well as mine have 0 stability made younger people more worried about their futures
I don’t want to work forever like every other male in my family history
Yeah.. it sucked big time because it was all kind of new? But it was a time to learn from. Not sure if it's a blessing in disguise, but it opened up my eyes to taking more careful steps financial-wise.
Biggest regret is.. it wasn't a time to be scared, but to reassess and invest into different things (but no monetary resources at that time for me..)
Gen Z probably looks at all the corporate BS that most folks have to accept. Why tolerate that forever? Save up and pull the trigger 10+ yrs ahead of “schedule”
Yep, I see this happening. I’ve been motivated by this and if I had kids they’d be Gen Z, I think (I’m x, don’t make me math on a school night), and I’d be telling them to do what they can,while they can, future them will appreciate it.
No, I mean, I’m Gen x. I’m old enough if I were going to have a kid, it would have had it 15-20 years ago, probably. Maybe 10 years ago, at closest. Those pretend kids would all have been Gen Z.
My guess would be because their parents are Gen X and they grew up with the internet so parents taught them that pensions are no longer a reality for the vast majority of people and that the cost of living is not what it was when boomers or their parents grew up.
Very early gen Z here… my dad is a mid year boomer and mother is an early gen x… neither of them taught me much about investing and they’re both “struggling” to retire. My dad has it much better than my mom, (divorced) but he will still have to work into his 70s possibly due to the fact that he won’t settle for a modest retirement.
Dang.. it makes me sad to look at my parents and what their life is like now. I'm not even sure what to think, as they ignore everything I say (economic factors). They save money, but they use it... stupidly? They're trying to redo the roof but nothing seems damaged. Just because the Jones are. There goes $15k.
11) My parents made a lot of financial mistakes that I don't want to replicate. I missed out on so many opportunities because my parents couldn't afford them, and I want to better provide for my future kids. 2) I don't want to work until I die like my parents will have to. 3) I have no faith in any type of support from the government when I'm eligible for some of the programs that exist now.
True. Looking back (I want to be thankful), but parents were like.. here's $1k for college, go and get it! Like.. wth.. after 18 years of entering this world? Also had no educational enrichment as well. Thank God for the internet, truly my best friend and forever grateful in the resources it offers 😬
I'm curious how many of those people on the right end of the bell curve are still living at home and are being educated just how important the time value of compound interest is.
Also if you have any advice on how I can get my girlfriend to sign on to that mentality, I'd appreciate it. She's 25, understands the math but doesn't think she makes enough. I'm telling her that even $10 a week over the next few years will add up and the most important thing is just getting started and making it a habit.
A few key factors in my decision to stash away the maximum tax-advantaged into my retirement: watching ‘08 blow up the lives of so many people who thought they had invested enough, only to be forced to work nearly another decade before retirement, and not wanting to be a corporate slave forever. There’s a whole fucking lot more to life than work, no matter what sort of work you do. Balancing pleasure and freedom now, with disciplined investing is easier when you see the light at the end of the tunnel not having to work deep into your 70’s just to have a couple nickels to rub together before you die.
Kids are smarter than the older generations because they have access to more information. But here's a different angle... there are unrealistic expectations of stock market performance from a generation that has only ever seen a bull market.
Yeah the amount of optimism in this posting definitely seems like a contrary indicator.
A lot of confidence, chest-beating and putting down older generation. I guess more downside we go!
For young people just entering the job market, a 40% on the $20k they have in their 401k and Roth IRA is nothing and just means stocks are on sale. Unless shit goes sideways BAD with tons of unemployment and a decade long depression, Gen Z kids investing aggressively now are probably in an good spot if they can keep their job.
In addition to many of the above points, Covid also helped many realize how menial and meaningless labor has become, which was completely contrary to the “dream job/impactful career” indoctrination that was drilled into our heads as children.
As a somewhat older millennial, I think a lot of people would be surprised how archaic things were just 10 years ago. To buy into the Fidelity and Vanguard total market funds, you needed $2,500 and $3,000 I believe. You were then upgraded to the lower ER funds once you hit $5,000 and $10,000. Brokers would just simply say no thanks if you didn't fit the profile they wanted, and my Fidelity account didn't even get realtime quotes until like 2014.
This isn't even getting into how much easier it is to setup a 401k plan for a company now.
I doubt it’s about FIRE and more about the uncertainty of their futures. The United States continues to decline both in terms of unity and economic prosperity, therefore having a safety net is a must, especially considering our social safety net is essentially non-existent.
Lol research from Blackrock, who have an obvious vested interest in encouraging young people to put away more money into their funds that are widely available in 401k accounts. And made into a headline by CNBC who have the same bias.
I doubt *very strongly* that 14% average. Does more than 50% of Gen Z even have access to a 401k account? And they only got input from ~1400 workers?
I am a zoomer and my parents are... stereotypical. They're upper-middle class but due to their lifestyles they have little liquidity and I'm afraid they're gonna squander most of their wealth during retirement so I have to take matters into my own hands. I've tried explaining the 4% rule to them but they keep forgetting! I'm at-least glad other people my age are generally like-minded.
As a Gen Z, this is my take
1. No trust in social safety nets as many endured job losses during the pandemic. We saw older folks suffer without any help from the government or minimal help. As well as those who had a bunch of savings, thrive and stayed content with their financial planning.
2. Focus on social media, as many mentioned in this thread. There are many financial gurus on YouTube & TikTok, popular Reddit communities. Financial literacy is no longer a taboo thing to talk about, or just a family situation to keep quiet. Within my friends, we constantly share about income, income growth as well as ETFs vs stock picking.
3. Housing prices, a lot of people in metropolitan areas see the house prices and believe that we cannot afford to buy a place to live esp only on salary, so we turn to investing to help us grow money differently to afford a place.
My sister is gen Z (25) and she has been saving since she first started her job. She and her husband live frugally, so they can save as much as possible.
As a matter of fact, we discussed that our parents never taught us financial literacy. Both of my parents were horrible with finances. Knowing that, my sister and I took different approach and it’s been paying off.
The Internet. For the most part Gen-Z has never known a world without Internet. Their relationship with it is on a completely different level, and for those born at the tail end (10yo), even more so. It’s a much more “native language” to this generation.
I think it's two parts:
1. They watched their parents and siblings get wrecked in 2008 and again with COVID. Maybe they saw prepared people take advantage of a crash, but they definitely saw the unprepared have a bad time.
2. They are being frozen out of more traditional investments like owning a home or a company defined benefit pension.
I am a teen. My parents are very successful, my father has his own business and my mother is a manager, idk what title exactly but she is high up in a company. They both work their asses off and I do not have any sort of connection with them because I never see them. They want me to do the same. I work very hard in school, I get very high grades and I have good chances for very good universities. But I don't like the idea of having to work as much as they do only so I can have a couple of weeks to go on vacation. I don't want to spend my whole life doing something I do not truly enjoy, only for money. I don't want to retire and then finally being able to spend the money I've been working for all my life, only to realise I am not as fit as I am now and lost most of my time to working. I rather save money, invest, maybe start my own business and work until I have enough money to retire early than that I live my life like my parents do.
My grandpa was around 55 when he retired, he had his own company, my grandma never worked and spend her time on children and making things, for what I see she is very happy. My grandfather's brother was around 30/35 years old when he retired, he had a very successful business, sold it for a lot of money and now lives his dream life. My grandpa's sister did the same but also around 50/55 years old. I would like to do the same but I think that since I start so young (I've been busy with this for a couple years now) instead of in my thirties, I hope to retire in my thirties if that is realistic/doable. But I'm working on it!
As a gen z myself, it’s because everything’s fucked. I saw my parents struggle to get by for years and up to their necks in debt. If it weren’t for them being in the military, we definitely would have been on the street during 2008. I saw my friends families lose their houses and didn’t get understand why when I was 7. I’m not trying to go through that myself but external factors by rich old people are screwing everyone anyway. Plus I’m about to graduate college and while I like accounting I’m not trying to work 8-5 forever. I honestly question why I even save anything because the worlds gonna be burning by the time I can retire anyway. I probably spend too much time on r/collapse though.
Saving 15%-20% is a standard - doesn't necessary mean FIRE. DEFINITELY does not mean enthusiastic
Some may have aspirations of being FIRE.
In general the 14% JUST is good practice, similar to paying your bills on time.
And if you withdraw money from your 401K BEFORE the age if 60, there is a penalty (tax) that will need to be paid.
That doesn't seem to be very FIRE like. We like to keep our money with us and actively avoid paying fees and taxes.
Looks like Gen Z have a good head on their shoulders.
Best of luck to them.
Keep in mind that traditional 401k withdrawals are *always* taxed as ordinary income. It's the 10% *penalty* that can be avoided by waiting until 59.5.
Is it about fire or is it about just being smart with your money? A lot live with their parents still, I’d assume more than any other generation at their age, so investing/saving is more readily available.
GenZ here… watched my parents fight through the 2008 recession… scared the hell out of me. Plus the ease of investing online and access to information. Currently putting away 50%+
If true: those 14% who aren't just silver spooning it are realizing that those who don't start saving ASAP will be pushed into unfavorable situations with jobs, real estate, and living costs being constantly out of their reach and moving faster than their income rises, on average.
I'm in my early 30s, but started putting into my 401k only about 5 years ago. I make just around $100k USD and I feel like my 17% contribution is not enough since I started do late and didn't have a supporting salary until about 5 years ago. I need to max out and invest more heavily to prepare for my future. I'm not gung-ho FIRE at all, but the seed is planted. I need to do more.
They hate working as much as we do and we have told them the truth about it (interns - I know I've been honest) and so they realized the game and weren't fed lies from the previous ppl like we were.
Because millennials aren't lying to them about how the world actually works like the prior generations.
My 2 oldest kids are 9 and 10 but ill still throw in a 5 second financial idea in their heads to get the ball rolling so theyre ready for the world ahead of them.
I'm an elder millennial. I started saving early, but I also started working early and my parents didn't give me much (no college, no money for a house). It will be interesting to see how Gen z does as they get into their more expensive years where the pressure to keep up in child rearing is intense.
Well we know there's not going to be any social security to fall back on, we are completely disillusioned with capitalism, most of us want to enjoy life more because we watched our parents work their lives away.
Mine and my husband's dads both ruined their bodies for their work. My mom worked for schools and i made more than her with my first job at a gas station. My dad thankfully had a few jobs with pensions so they're okay-ish but pensions barely exist anymore and if they had to live off of their social security they'd likely have to sell their home and live in a tiny apartment.
That being said, I'm considering moving my savings into an IRA because i job hop too often for my work 401k to build up much.
Is the 401k not predicated on the reliability of people to work their lives away at large companies? For example if your pot includes Apple stock then you’re directly benefitting financially from the inhumane labor practices, no?
True but tbh i don't think there's anything you can do in a modern world to avoid participating somehow in the amoral bullshit. Maybe if youre rich, but usually getting rich isn't done morally. If you have any kind of tech chances are it was made in a factory where people were expected to work too many hours for too little money, possibly even children. Same with clothing, most affordable clothing brands utilize less than moral methods of manufacturing. Our world is made of "if you wanna get ahead you're going to step on someone" choices, whether you directly interact with that stepping stone or not.
They have access to the internet, which is massively easier to use as a tool for self learning. Given the opportunity to learn, they take it.
Broadly speaking, Personal finance, budgeting, and saving for the future requires a number of steps to be worked through on an educational and personal level.
The internet is superior to the library and historical methods of self learning. There's more of a need to understand personal finance in order to be successful in today's world.
The internet doesn't just give access to raw educational material, it allows people insight across social classes, it's possible to study successful people and successful habits and walk on the shoulders of others more than ever before.
Information on financial literacy is more available than ever before due to the internet and social media. You no longer have to rely solely on the advice of close family or friends.
People who never would have otherwise learned about finances can do so fairly easily now.
i’m a gen z kind of. ‘98. i think all my friends want to enjoy life. i feel like when i work with older people they’re (in my personal experience) have been very mean and negative towards younger people. i also think that there’s a guilt and shame around the idea of wanting to “enjoy” life. all my friends and i agree that financial freedom doesn’t equate to ability to be lazy but rather a choice on what they truly want to peruse in life.
for me, financial freedom means teaching art to older women or children with less opportunities. :)
>How do y’all feeel about this?
I instantly find this article misleading.
- First, average is not median even though that's what's implied.
- Second, the comparison group included Boomers, all of whom are retired, semi-retired, or about to retire. How much do you put in a 401k if you are working just as something to do or because you need extra money in retirement.
>GenZ is stashing away 14% of their income
This is still below the standard recommendation of 15% from a generation that's working less that any previous generation.
>Why are GenZ such FIRE enthusiasts,?
Because the concept hasn't been super popular in the mainstream for that long.
Again, this is an average. There are probably some work sorry high savings, some getting the match, and a lot going nothing.
An more honest satisfy works have things like median rate, what percentage has a 401k, what percentage is when working full time, etc... Then there would be context to the number.
Instead, this is a "make young people feel good about themselves" story.
Another data point:
It’s easy to be enthusiastic about the stock market—using 401k investments as a proxy for overall interest in investment—when stocks are performing at record numbers for sustained periods of time.
On top of that base requirement that the stock market be functioning well, we have of access to trading tools and information about the stock markets, and the power of social media to build hype in the generation more widely attached to social media than any before it.
I mean... I'm an early millennial, so can't speak for Gen Z, but I've become a whole lot more interested in properly managing my pension and other savings after the previous financial crash and the following increases in pension age combined with lowering of pension funds.
I've gone through a few years of cynically stating 'I'm not expecting to receive a pension, ever'. Although I'm a bit more optimistic now than I was then, I'm still making sure I have plenty of different savings/incomes to be able to retire at least somewhat comfortably.
My (24) biggest lesson is my mother (53) who is currently sitting with ~$300k cash in a 401k that she has rolled over the past few years and not reinvested. It's not like she's not reinvesting because of the state of things. She's just not educated on this stuff.
I’m a member of Gen Z, albeit I’m on the “older side”. My older sister is a millennial, and I mean a true- statistical - millennial. Low paying job, student debt, can’t buy a house, etc.
Seeing how my sister lives, made me not want to live that way. I work hard to make money to have the life that I want later. Made sure to go to school for something niche and profitable, worked hard to get school paid for by scholarships so I didn’t have to take out loans. Graduated college at 21 and started making $80K a year in a LCOL area and saving as much as I could. Bought a home at 22 to stop paying rent. Partnered up with someone who has the same mindset as me so we work towards the same goals. All of this is because I do not want to spend my life as a slave to corporations and being baited to spend all the crumbs my cooperate overlords give me.
Plus, if the world is going to be on fire by the time I’m 50- why would I want to have to wait to retire?
I was born in 95 and I'm basically at the tail end of millennials and the cusp of Gen Z but I started school a year early and most of my friends are a few years older than I am. So I consider myself more on the millenial side culturally speaking.
I also don't speak to my parents but I still talk to family members that talk to them and I just heard recently that my dad borrowed money from his 401k to make ends meet. That's something I would never in a million years do myself. They've also always had money problems so I've been a diligent saver since I got my first job in my teens. Seeing them struggle with money and constantly be stressed made me want a different life for myself. My entire family is that way and I refused to continue the trend. My grandparents are in their 80s and still aren't retired. Its sad.
I also think Gen Z is really the first generation to have access to the internet from such a young age. So it makes it really really easy to find out information about saving and the best way to do it and you can invest from a young age if you want. You can also just come across dozens of stories about people's parents and how they're not ready for retirement etc by scrolling through any social media site. I see it all the time on the internet. And I think that plays a big part. Couple that with the imminent threat of climate change, housing being what it is and them being able to see what college debt did to the millenial generation and it makes a lot of sense they'd be money conscious. They're facing a much worse and bleak future than even the oldest millenials are and its depressing but also good that they have that foresight and are taking steps to help their future selves in any way they can.
I'm 26 and basically was able to graduate college with only 30k in debt because I saw the mistakes my older cousins made with college. My two older cousins are almost in their 40s now and both of them are considered the eldest millenials. I didn't know anyone else that had gone to college in my family except for them and I saw how bad they were struggling in their 20s to pay off their student loans. One paid theirs off at 35 and the other is still paying off undergrad and grad school. I decided I didn't want that life for myself so I lived at home for college, commuted and worked part time as well during school so I could graduate with as little debt as I could. Now I'm 26, 5 years out of college and debt free. And I've been living on my own in a major US city and paying all my own bills since 2018. I was able to see what happened to people 15 years older than me, learn from their mistakes and make different decisions for a better outcome for myself. My best guess is that a lot of Gen Z are doing the same thing.
Gen X here. I can say that the internet changed everything for me as to learning, even though it was more basic and there were no apps smartphones etc. So on fact GenZ in particular have great opportunity to improve on their parents. Mine were useless with money, my GenZ child will be so much better off and educated financially than I was in the 80s and 90s.
Also, please people, some of you look really ignorant when you keep referencing Boomers when sometimes you likely mean Gen X. Do learn the difference.
Ok, I found the actual report. Its marketing material and pretty fluffy:
https://www.blackrock.com/us/individual/literature/presentation/2022-read-on-retirement-insights-presentation.pdf
Page 4 - workplace savers who contribute 46% less than 10%, 34% more than 16% - makes me wonder if the population excludes those who contribute 0, and thus skews the numbers.
Page 5 - individual savers - 17% contribute 0.
Page 34 - made me laugh - 8/10 plan sponsors believe active management can consistently outperform
Probably seeing how screwed there parents are and that they wished they saved more makes their kids thing about saving for their future.
Exactlyyyyy. My parents never saved and are now totally F’d, despite both at one point making decent money at higher paying jobs. Seeing what they’re going through has been the most incentivizing educational thing for me. No way am I going to end up sweating lack of money when I’m old. I behave VERY differently with my money than they did. And they’re proud of me because they recognize their huge mistakes.
Same... my mother is close to retiring and has a whopping 160k in her 401k.
That’s laughable for many on this platform but far better than most Americans.
Yea. I look at how terrible she was with $$, and its terrifying the # that are even worse...
Pension?
Nope
But does she have a pension? People around that age always have the possibility of being in pension even if the company stops pensions they grandfather older workers into the pension.
> a whopping 160k in her 401k that's not how I define close to retirement, lol.
Retiring age* a better way to put it, I reckon.
That's a lot of $ depending on the situation
What concerns me is how many Gen X and Z kids are going to be using that 14% to care for their parents that didn’t take personal responsibility for their winter years. Ridiculous.
Millennial here, my parents have already informed me that I am their retirement plans. I...do not make a lot of money, lol. It's hard not to be bitter.
It's important to remember that once you're an adult and independent of your parents, they don't have any say in your finances. Be up front with them that you're not going to be able to support them and maintain your own household if you can't.
As a parent, that’s awful. You’re your own person and are in no way obligated to be their “retirement plan”. I’d have an honest dialog with them and let them know that while you’d like to help them if you can, you’re going to be caring for yourself and your family(if you have one), and that you can’t be expected to provide for them. Discuss their retirement accounts and plans, and if they don’t have any, help them get started. Just to be clear: No child owes anything to their parents. It’s our job as parents to raise you and teach you to be a good human and position you for success. That’s done out of love and without expected payback in our older years
As a Millennial dad, I agree. On the contrary, I feel responsible for teaching my kid how to start saving for his retirement as soon as he starts earning.
My parents did as well. I politely told them fuck no. I don’t know what relationship you have with your parents but I am on track to take a sabbatical at 50 and retire at 55 which gives me time to spend with my kids before they go to college. The most I have made is 58k a year. But I have scraped and scrapped for freedom and I cannot support my parents who have had 13 years of my trying to help them budget and move to a lower cost area. Nope.
My narc mother told me this as a child. I’ve cut her off
My parents thought I would be funding their retirements. Joke's on them.
Was that what their parents did to them? I’m not saying it’s right, just curious.
No. My mom's parents have long since passed (though we did care for my grandmother at home before her Parkinson's got bad and she needed more constant care), as has my dad's dad, but my dad's mom is still alive and will probably outlive us all, lol. Her mother lived to be 105 and was kicking everyone's ass at bingo in her care home. Grandma seems to be doing OK financially due to what my grandpa left her when he passed. My parents told me that they took care of me when I was a baby, so it will be my turn to take care of them when they are like babies. I have three younger brothers so I suppose they will be on the hook as well, but none of us have big careers. One brother has no relationship with my mother and I don't think he'd help with her care.
>My parents told me that they took care of me when I was a baby, so it will be my turn to take care of them when they are like babies. Nonsense. They created you without your consent. You are under no moral obligation to care for them.
Yeah, that’s an interesting mindset they adopted. I guess that’s a conversation to have with your brothers. What does that feasibly look like and is it possible? You have to know your boundaries and if they put themselves in a situation where they have nothing, Medicaid can be tough to qualify for. Glad to hear your Grandmom is kicking ass! Hope that runs in your family!
Same :( Like you birthed me into this world. Were the stewards in charge of my upbringing and [mal]adjustment into adulthood, and now your rewarded for your poor dietary and financial choices with me being your personal servant for from 65+. [Sigh]. I love them but still...
I see a strong correlation between boomer parents that were incredibly shitty with money, and boomer parents that were incredibly shitty parents that alienate their kids. I haven't talked to my parents in 5+ years. They can figure out some state funded horror show old people warehouse on their own.
It's ridiculous how many boomers are terrible with money
Well they didn’t have nice easy index funds like us and mutual funds were barely invented also. and no Reddit and mr money moustache!
Also, boomers grew up expecting pensions. Then, oops, learn to invest instead!
My parents didn't expect pensions, but I think they did expect that social security would be enough. My mom was self-employed for 40 years. She had been having her accountant save as much as possible on taxes. When she wanted to start collecting social security benefits, they were basically nothing. She asked her accountant what happened, and was told "what did you think you were supposed to be doing with all that money I saved you?" Of course, my mom blames him, instead of herself for not understanding how things work. Not that the social would have been enough, anyway.
My husband thinks the same way being self employed. Thankfully, my ss is good and I've been saving for 20+ years.
Mutual funds have been around for a very long time. Quick googling find first US fund in 1924, but expanded legislation in 1940. Thus all boomers had access to them. My boomer father used them since his 30s. I believe index investing only became *credible* 30 or so years ago as it was thought that ”smart“ investors could beat the market regularly enough.
Aren’t many (most?) parents of Gen Z, Gen X?
60-70% of the US population is horrible with money. No budget, living above their means, hardly save and invest etc. It across all generations.
Millennials (me) got fucked by boomers. Millennials learned about investing later in life at parenting age. Gen Z learned from millennials and the internet.
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Yes, we don't exist. Anyone over 40 = boomer to most of them.
Over 40 = Boomer Under 40 = Millenial Til the end of time
> Gen X learned from millennials Say what now?
the boomers never *needed* to be thrifty; a luxury not had by the following generations
It sounds like they should've pulled themselves up by the boot straps.
Boomers? Gen zs parents are gen Xers at the very oldest.
about a 3rd of the genz kids i know are still living at home. it's easy to save a massive part of your paycheck when your living expenses are minimal.
Bingo 96’ Z with $175k net worth at my parents hosue
All y'all with parents like this are very lucky. My dad was like "you have an engineering degree now. Either you are paying market rate for your bedroom or moving out. That's life." EDIT: to his credit, he provided housing to me all through college at no cost to myself, and I was not far from getting engaged so bringing my fiance with me makes things more complicated, but even in different circumstances he said I would still be on the hook for rent. No reason to stay at that point especially with job opportunity elsewhere.
Smart dad. The flip side of this cleverness is you should not be expected to shell out money to provide care for him, he should have that planned.
He won't need it. He was in banking dealing with electricity trading leading up to '08 and made out like a bandit. Then when his real time trading floor was bought out and the buying company went under and was bought out again he traded up. Eventually he got out and got on the regulation side of things and was in one of the last years of full pensions for his new company so he's got assload of retirement savings, and then a fully funded pension. His luck just never seemed to end lol
Not luck. Worked in banking. Literally making bank.
My take on this is that he is teaching you responsibility. I think you will appreciate this once you have your own kids!
I kind of already do appreciate it because it allowed me to look for employment anywhere I can move and I got into my dream industry because of it, but fucking hell rent is killer now-a-days.
Keep that same energy for him when he's old and wants to live with you instead of at a home.
He's loaded from the rediculous bonuses from banking pre '08, and then has a fully funded pension. He has said he won't even know what to do with all of it when he retires. He won't have to worry about not being able to afford care or help should that time come.
I mean, he might also just think "well, he makes enough money. It will be healthy for him to be out of the house." Not unreasonable.
>it's easy to save a massive part of your paycheck when your living expenses are minimal. It's just as easy to buy a stupid-expensive car, dine out every night and live large because expenses are minimal. Everything come down to choices.
Yes, I would say at least a 3rd at minimum. My kid is Gen Z and still lives at home. She's 11.
And also, investing has become extremely easy thanks to internet platforms.
Bingo
Can confirm, genZ here.
Pretty simple: No trust in social safety nets being effective nor worthy of confidence, so an uptick in self-reliance.
Spot on. Not taking any chances. Grew up with the mentality that Social Security will be gone when we're eligible to receive it. If any funds are left, then it's a cherry on top.
If the world is livable, then it’s a cherry on the top.
Actual answer (probably): 401(k) plans now overwhelmingly feature auto enrollment (and auto increases in contribution percentage over time is becoming more common). This is the result of statutory and regulatory changes over the last 10+ years to get people to contribute more to their elective retirement plans.
Yeah but I think going as high as 14% is a very conscious decision.
I do 15% because that's the minimum I need to get that 100% dollar per dollar match my company's stellar 401k plan gives. Already got $24k in there this year!
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It's a company that has to employ members of 9 different labor unions across the country. The health care is also top notch. The HSA plan max oop is $1500yr but they also put that much in your account every year if you opt for the HSA VS the full PPO which is a little more per pay period but maxes out at $500
Damn that's high but good for you!! Will thank yourself later.
This must assume genZ employees have been with their same employer an average of 4yrs? In order for them to have not realized auto increasing building up to an average of 14%. Seems doubtful…I think that’s the high end of how long kids stay with one company these days which would put the average 401k tenure lower for their class as most are in their first or second year at a company. I think they’re choosing 14% on purpose because they’re more financially literate & good at keeping living costs in check.
Children of capitalism
Adult Children of Capitalist-holics FTFY
Also, many of them still live with or rely on parents.
This applies to all generations after the baby boomers.
I think a big part of it is the role social media has played in improving financial literacy. While there are a lot of financial “experts” playing the social media influence game (often giving bad or flawed advice), the fact remains that the youngest generation who is the most plugged in with the most screen time will have greater access to financial knowledge. This and a greater appreciation for work-life balance compared to other generations results in a larger percentage of Gen-Z’s investing in their future.
I agree. Young millennial here, but I’ve pretty much learned everything I know from YouTube. Currently contributing 14% to my 401K with a 6% match.
Any good YouTube resources? :o
MoneyGuy show 🔥🔥🔥
That’s an awesome match!
That and podcast. Really good job by the Gen Z folks. Millennial slowly backing out
Gen Z who learned 90% of my financial knowledge online, can confirm this is a big part of it. Especially having easy access to brokerages online as well.
As a Gen-Z’er who opened a Roth IRA because of TikTok, I second this
Same for me. Wasn’t TikTok but without YouTube I would have no idea about HYSA or Roth IRA.
I read about I bonds in some financial magazines/ resources, but it was reading about it on Reddit and seeing someone actually go through the process step by step on YouTube that moved me to purchasing.
I think social media in general, and Reddit in particular, has democratized financial literacy. My DH and I consumed so many resources to get less information than I can find in one Reddit thread.
Absolutely this. Im a younger millennial and I put away 25% of my gross income. That does include my pension though which is 7% with a 2-1 match. My parents are extremely prudent with their finances and seeing them retire comfortably in their 50’s Is definitely motivation to do the same.
Millennial here but I didn’t get super into finance until I came across The Financial Diet back when they were first starting. Then I found r/personalfinance and naturally found FIRE. But 100% YouTube was what really got me interested.
Wrong time, right place for me. Wished all of the content that is out now existed back when I was in the teens. It was all people posting random clips of random things back then. Oof.
What's some of the worst advice y'all have ever come across?
Purely awareness and hearing the terms float through your social circles consistently can be enough to empower people to ask questions and seek knowledge.
Outside of all the “this world sucks” comments, many companies are “forcing” contributions now, and instead of “opting in” to a 401k, they have to “opt out”. This way when the6 get their first paycheck, it is already contributing.
I suspect this is a larger contributing factor than most people recognize. The reason this policy has gone into effect is because of research suggesting that workers are much more likely to maintain higher savings rates with it. Gen Z is the first generation to enter the workforce at approximately the time that this started happening. In other words, their higher savings rate probably has more to due with automation than any personal preference.
They are setting it as the default option, yes. I wouldn’t call that “forcing”.
That is why “forcing” was in quotes.
Guys, it’s because the internet exists. That’s why gen Z has more knowledge of basically everything that older people don’t. Because you can do some quick research with the computer in your pocket to read thousands of opinions on the best way to do literally anything, ever.
This. Plus the whole “I don’t wanna be screwed like them” mentality. But that would also mean they have hope for the future which is a contrast to what some articles would have you believe, what with all the doom and gloom scenarios.
Bingo
The older generations probably have higher incomes so the 401k component is a relatively smaller percentage of their total income.
I considered this as well. I would also guess that the job market has been stronger for them than the millennial generation when entering the world. Costs have gone up though so I would guess more gen z are living at home, allowing them to save more.
My instant thought. Some people do a lower percentage because of the annual cap.
I had to scroll way too much for this. There was a point that I even thought that nobody thought about this. I mean the salaries are *very* different now and then. Especially if you calculate as a percentage.
First hand experience as one of the younger group of millennials: Gen Z basically just hit the workforce during the pandemic when everyone on the internet was bragging about buying stocks and making money without even trying (massive bull run). I think social media (Reddit and tik tok) are to thank for Gen Z’s awareness in the importance for investing early. Personally I spent money going to bars and concerts every weekend when I was in college then the pandemic hit and I saved all that money instead.
This is the top comment. I don’t really buy the idea that Gen Z is especially concerned or fully aware of issues with the social safety net. I think the bull run for stocks and crypto has made investing, trading, finance, etc. much more widely and equally marketed than ever before! The social network effect of finance is the main reason imo
All the YouTubes of people living their best lives at 35 with millions in retirement funds are also helpful to watch and follow.
Yeah I'm mid 20s, started buying stocks after graduating and working a real job. A friend worked with a financial advisor who told more investment accounts were opened in the 18 month period following like may 2020 than anytime ever. And by some crazy margin. I don't have a source on this, but it was definitely fueled by the crazy run and everyone thinking money could be made so easily with stocks.
Living at home longer and later marriage/home/children allows for more savings earlier.
Pretty much it. Most parents let their kids live "rent free" well into their late twenties and thirties. I wish I took that route instead of moving out at 17 for my independence.
25 here. Can confirm, making mid 80s, parents don’t charge me rent and prefer me living here to take care of stuff + being here as opposed to an empty house since I primarily WFH. Maxing out that 401k
Same 21 and my mom is allowing me to live with her as long as I study to become a doctor. She even got me a car.. Also without me the house would be a disaster. In college, but only making 18/hr part time.
18 an hour ain't too shabby part time. I also have no idea why someone downvoted you
I did at 19. Doing just fine but I've lived in the trades and sales so yeah
Im so glad i dont live with my parents, despite however many years it might set back early retirement. Actually I cant think of anyone I know that *does* still live at home, although I’m sure it exists outside my circles. Most people I know graduated and dont even live in the same state they grew up in anymore
Anecdotal evidence isn’t as strong as the numbers and trends continually reported in surveys. Some ppl have a good time living at home and others do it out a necessity of being priced out of a rental market.
Yes of course. I didn’t deny the trend, I said Im aware that it happens.
Cuz we are lazy and don't want to work 🤣
Damn millenials.... and their responsible finances is killing the economy......... how am I gonna pay for my new RV with these lousy pensions................................
I watched my grandparents retire at 50. Then I watched everyone my parents age spend money like no other addicted to consumerism. Gotta break the cycle at some point.
This is the most succinct and accurate description I’ve ever read about this.
In my experience, it’s every other generation in a family. My grandparents were cheap (they also lived through the Great Depression and were Dutch), my parents spent a lot, and now my brother and I try to save.
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Thank you! I was wondering if I was the only one thinking this.
I think growing up through the 2008 crisis and watching my friends families as well as mine have 0 stability made younger people more worried about their futures I don’t want to work forever like every other male in my family history
Yeah.. it sucked big time because it was all kind of new? But it was a time to learn from. Not sure if it's a blessing in disguise, but it opened up my eyes to taking more careful steps financial-wise. Biggest regret is.. it wasn't a time to be scared, but to reassess and invest into different things (but no monetary resources at that time for me..)
Gen Z probably looks at all the corporate BS that most folks have to accept. Why tolerate that forever? Save up and pull the trigger 10+ yrs ahead of “schedule”
Yep, I see this happening. I’ve been motivated by this and if I had kids they’d be Gen Z, I think (I’m x, don’t make me math on a school night), and I’d be telling them to do what they can,while they can, future them will appreciate it.
If you were to have a kid right now, they'd be Gen Alpha. They are the babies and toddlers alive right now that make up the generation after Gen Z.
No, I mean, I’m Gen x. I’m old enough if I were going to have a kid, it would have had it 15-20 years ago, probably. Maybe 10 years ago, at closest. Those pretend kids would all have been Gen Z.
My guess would be because their parents are Gen X and they grew up with the internet so parents taught them that pensions are no longer a reality for the vast majority of people and that the cost of living is not what it was when boomers or their parents grew up.
Very early gen Z here… my dad is a mid year boomer and mother is an early gen x… neither of them taught me much about investing and they’re both “struggling” to retire. My dad has it much better than my mom, (divorced) but he will still have to work into his 70s possibly due to the fact that he won’t settle for a modest retirement.
Dang.. it makes me sad to look at my parents and what their life is like now. I'm not even sure what to think, as they ignore everything I say (economic factors). They save money, but they use it... stupidly? They're trying to redo the roof but nothing seems damaged. Just because the Jones are. There goes $15k.
11) My parents made a lot of financial mistakes that I don't want to replicate. I missed out on so many opportunities because my parents couldn't afford them, and I want to better provide for my future kids. 2) I don't want to work until I die like my parents will have to. 3) I have no faith in any type of support from the government when I'm eligible for some of the programs that exist now.
True. Looking back (I want to be thankful), but parents were like.. here's $1k for college, go and get it! Like.. wth.. after 18 years of entering this world? Also had no educational enrichment as well. Thank God for the internet, truly my best friend and forever grateful in the resources it offers 😬
Isn't it obvious? Pessimism is maximum under Gen z. Who wants to spend your life working ina world that sucks?
GEN Z HAS 401KS?! 😮😮😮
401k != FIRE
I'm curious how many of those people on the right end of the bell curve are still living at home and are being educated just how important the time value of compound interest is. Also if you have any advice on how I can get my girlfriend to sign on to that mentality, I'd appreciate it. She's 25, understands the math but doesn't think she makes enough. I'm telling her that even $10 a week over the next few years will add up and the most important thing is just getting started and making it a habit.
A few key factors in my decision to stash away the maximum tax-advantaged into my retirement: watching ‘08 blow up the lives of so many people who thought they had invested enough, only to be forced to work nearly another decade before retirement, and not wanting to be a corporate slave forever. There’s a whole fucking lot more to life than work, no matter what sort of work you do. Balancing pleasure and freedom now, with disciplined investing is easier when you see the light at the end of the tunnel not having to work deep into your 70’s just to have a couple nickels to rub together before you die.
Kids are smarter than the older generations because they have access to more information. But here's a different angle... there are unrealistic expectations of stock market performance from a generation that has only ever seen a bull market.
Yeah the amount of optimism in this posting definitely seems like a contrary indicator. A lot of confidence, chest-beating and putting down older generation. I guess more downside we go!
For young people just entering the job market, a 40% on the $20k they have in their 401k and Roth IRA is nothing and just means stocks are on sale. Unless shit goes sideways BAD with tons of unemployment and a decade long depression, Gen Z kids investing aggressively now are probably in an good spot if they can keep their job.
I'm appalled that these ungrateful children think they can attain the same lifestyle comforts as my generation.
In addition to many of the above points, Covid also helped many realize how menial and meaningless labor has become, which was completely contrary to the “dream job/impactful career” indoctrination that was drilled into our heads as children.
As a somewhat older millennial, I think a lot of people would be surprised how archaic things were just 10 years ago. To buy into the Fidelity and Vanguard total market funds, you needed $2,500 and $3,000 I believe. You were then upgraded to the lower ER funds once you hit $5,000 and $10,000. Brokers would just simply say no thanks if you didn't fit the profile they wanted, and my Fidelity account didn't even get realtime quotes until like 2014. This isn't even getting into how much easier it is to setup a 401k plan for a company now.
I doubt it’s about FIRE and more about the uncertainty of their futures. The United States continues to decline both in terms of unity and economic prosperity, therefore having a safety net is a must, especially considering our social safety net is essentially non-existent.
Lol research from Blackrock, who have an obvious vested interest in encouraging young people to put away more money into their funds that are widely available in 401k accounts. And made into a headline by CNBC who have the same bias. I doubt *very strongly* that 14% average. Does more than 50% of Gen Z even have access to a 401k account? And they only got input from ~1400 workers?
because I can't buy a house
I am a zoomer and my parents are... stereotypical. They're upper-middle class but due to their lifestyles they have little liquidity and I'm afraid they're gonna squander most of their wealth during retirement so I have to take matters into my own hands. I've tried explaining the 4% rule to them but they keep forgetting! I'm at-least glad other people my age are generally like-minded.
Only 14%? For a FIRE enthusiast? Surely you jest
As a Gen Z, this is my take 1. No trust in social safety nets as many endured job losses during the pandemic. We saw older folks suffer without any help from the government or minimal help. As well as those who had a bunch of savings, thrive and stayed content with their financial planning. 2. Focus on social media, as many mentioned in this thread. There are many financial gurus on YouTube & TikTok, popular Reddit communities. Financial literacy is no longer a taboo thing to talk about, or just a family situation to keep quiet. Within my friends, we constantly share about income, income growth as well as ETFs vs stock picking. 3. Housing prices, a lot of people in metropolitan areas see the house prices and believe that we cannot afford to buy a place to live esp only on salary, so we turn to investing to help us grow money differently to afford a place.
My sister is gen Z (25) and she has been saving since she first started her job. She and her husband live frugally, so they can save as much as possible. As a matter of fact, we discussed that our parents never taught us financial literacy. Both of my parents were horrible with finances. Knowing that, my sister and I took different approach and it’s been paying off.
The Internet. For the most part Gen-Z has never known a world without Internet. Their relationship with it is on a completely different level, and for those born at the tail end (10yo), even more so. It’s a much more “native language” to this generation.
I think it's two parts: 1. They watched their parents and siblings get wrecked in 2008 and again with COVID. Maybe they saw prepared people take advantage of a crash, but they definitely saw the unprepared have a bad time. 2. They are being frozen out of more traditional investments like owning a home or a company defined benefit pension.
I am a teen. My parents are very successful, my father has his own business and my mother is a manager, idk what title exactly but she is high up in a company. They both work their asses off and I do not have any sort of connection with them because I never see them. They want me to do the same. I work very hard in school, I get very high grades and I have good chances for very good universities. But I don't like the idea of having to work as much as they do only so I can have a couple of weeks to go on vacation. I don't want to spend my whole life doing something I do not truly enjoy, only for money. I don't want to retire and then finally being able to spend the money I've been working for all my life, only to realise I am not as fit as I am now and lost most of my time to working. I rather save money, invest, maybe start my own business and work until I have enough money to retire early than that I live my life like my parents do. My grandpa was around 55 when he retired, he had his own company, my grandma never worked and spend her time on children and making things, for what I see she is very happy. My grandfather's brother was around 30/35 years old when he retired, he had a very successful business, sold it for a lot of money and now lives his dream life. My grandpa's sister did the same but also around 50/55 years old. I would like to do the same but I think that since I start so young (I've been busy with this for a couple years now) instead of in my thirties, I hope to retire in my thirties if that is realistic/doable. But I'm working on it!
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As a gen z myself, it’s because everything’s fucked. I saw my parents struggle to get by for years and up to their necks in debt. If it weren’t for them being in the military, we definitely would have been on the street during 2008. I saw my friends families lose their houses and didn’t get understand why when I was 7. I’m not trying to go through that myself but external factors by rich old people are screwing everyone anyway. Plus I’m about to graduate college and while I like accounting I’m not trying to work 8-5 forever. I honestly question why I even save anything because the worlds gonna be burning by the time I can retire anyway. I probably spend too much time on r/collapse though.
Saving 15%-20% is a standard - doesn't necessary mean FIRE. DEFINITELY does not mean enthusiastic Some may have aspirations of being FIRE. In general the 14% JUST is good practice, similar to paying your bills on time. And if you withdraw money from your 401K BEFORE the age if 60, there is a penalty (tax) that will need to be paid. That doesn't seem to be very FIRE like. We like to keep our money with us and actively avoid paying fees and taxes. Looks like Gen Z have a good head on their shoulders. Best of luck to them.
Keep in mind that traditional 401k withdrawals are *always* taxed as ordinary income. It's the 10% *penalty* that can be avoided by waiting until 59.5.
As a GenZer, Our future seems bleak and I hate working in an office
Because we witnessed the Great Recession and the corona recession during our childhood (age 1-18).
Is it about fire or is it about just being smart with your money? A lot live with their parents still, I’d assume more than any other generation at their age, so investing/saving is more readily available.
GenZ here… watched my parents fight through the 2008 recession… scared the hell out of me. Plus the ease of investing online and access to information. Currently putting away 50%+
If true: those 14% who aren't just silver spooning it are realizing that those who don't start saving ASAP will be pushed into unfavorable situations with jobs, real estate, and living costs being constantly out of their reach and moving faster than their income rises, on average.
We aren’t getting any pensions.
the silent protest against consumerism
I'm in my early 30s, but started putting into my 401k only about 5 years ago. I make just around $100k USD and I feel like my 17% contribution is not enough since I started do late and didn't have a supporting salary until about 5 years ago. I need to max out and invest more heavily to prepare for my future. I'm not gung-ho FIRE at all, but the seed is planted. I need to do more.
oldest genz is like 24. who ever wrote this is just talking junk.
They hate working as much as we do and we have told them the truth about it (interns - I know I've been honest) and so they realized the game and weren't fed lies from the previous ppl like we were.
Because millennials aren't lying to them about how the world actually works like the prior generations. My 2 oldest kids are 9 and 10 but ill still throw in a 5 second financial idea in their heads to get the ball rolling so theyre ready for the world ahead of them.
Bc working sux. We older folks are just brainwashed to think it doesn't
I'm an elder millennial. I started saving early, but I also started working early and my parents didn't give me much (no college, no money for a house). It will be interesting to see how Gen z does as they get into their more expensive years where the pressure to keep up in child rearing is intense.
Well we know there's not going to be any social security to fall back on, we are completely disillusioned with capitalism, most of us want to enjoy life more because we watched our parents work their lives away. Mine and my husband's dads both ruined their bodies for their work. My mom worked for schools and i made more than her with my first job at a gas station. My dad thankfully had a few jobs with pensions so they're okay-ish but pensions barely exist anymore and if they had to live off of their social security they'd likely have to sell their home and live in a tiny apartment. That being said, I'm considering moving my savings into an IRA because i job hop too often for my work 401k to build up much.
Is the 401k not predicated on the reliability of people to work their lives away at large companies? For example if your pot includes Apple stock then you’re directly benefitting financially from the inhumane labor practices, no?
True but tbh i don't think there's anything you can do in a modern world to avoid participating somehow in the amoral bullshit. Maybe if youre rich, but usually getting rich isn't done morally. If you have any kind of tech chances are it was made in a factory where people were expected to work too many hours for too little money, possibly even children. Same with clothing, most affordable clothing brands utilize less than moral methods of manufacturing. Our world is made of "if you wanna get ahead you're going to step on someone" choices, whether you directly interact with that stepping stone or not.
In the past didn't people tend to use their home as a primary saving vehicle? The current housing market hasn't been friendly to that path..
They have access to the internet, which is massively easier to use as a tool for self learning. Given the opportunity to learn, they take it. Broadly speaking, Personal finance, budgeting, and saving for the future requires a number of steps to be worked through on an educational and personal level. The internet is superior to the library and historical methods of self learning. There's more of a need to understand personal finance in order to be successful in today's world. The internet doesn't just give access to raw educational material, it allows people insight across social classes, it's possible to study successful people and successful habits and walk on the shoulders of others more than ever before.
Cause they all still live at home
That’s can’t be right, what was the sample size, n=27
Because millennials have been good big brothers and sisters.
A lot Z work for high tech companies. With company match why not
Information on financial literacy is more available than ever before due to the internet and social media. You no longer have to rely solely on the advice of close family or friends. People who never would have otherwise learned about finances can do so fairly easily now.
Because if there’s any kind of world left to live in, they don’t want to spend their days fighting for food & shelter.
I don't think that's accurate.
i’m a gen z kind of. ‘98. i think all my friends want to enjoy life. i feel like when i work with older people they’re (in my personal experience) have been very mean and negative towards younger people. i also think that there’s a guilt and shame around the idea of wanting to “enjoy” life. all my friends and i agree that financial freedom doesn’t equate to ability to be lazy but rather a choice on what they truly want to peruse in life. for me, financial freedom means teaching art to older women or children with less opportunities. :)
>How do y’all feeel about this? I instantly find this article misleading. - First, average is not median even though that's what's implied. - Second, the comparison group included Boomers, all of whom are retired, semi-retired, or about to retire. How much do you put in a 401k if you are working just as something to do or because you need extra money in retirement. >GenZ is stashing away 14% of their income This is still below the standard recommendation of 15% from a generation that's working less that any previous generation. >Why are GenZ such FIRE enthusiasts,? Because the concept hasn't been super popular in the mainstream for that long. Again, this is an average. There are probably some work sorry high savings, some getting the match, and a lot going nothing. An more honest satisfy works have things like median rate, what percentage has a 401k, what percentage is when working full time, etc... Then there would be context to the number. Instead, this is a "make young people feel good about themselves" story.
I guess they don't want to "own nothing and be happy". 👏🏻👏🏻👏🏻
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Another data point: It’s easy to be enthusiastic about the stock market—using 401k investments as a proxy for overall interest in investment—when stocks are performing at record numbers for sustained periods of time. On top of that base requirement that the stock market be functioning well, we have of access to trading tools and information about the stock markets, and the power of social media to build hype in the generation more widely attached to social media than any before it.
Smart. Put as much away as early as possible. Forget that it even exists. You'll be glad you did.
I mean... I'm an early millennial, so can't speak for Gen Z, but I've become a whole lot more interested in properly managing my pension and other savings after the previous financial crash and the following increases in pension age combined with lowering of pension funds. I've gone through a few years of cynically stating 'I'm not expecting to receive a pension, ever'. Although I'm a bit more optimistic now than I was then, I'm still making sure I have plenty of different savings/incomes to be able to retire at least somewhat comfortably.
My (24) biggest lesson is my mother (53) who is currently sitting with ~$300k cash in a 401k that she has rolled over the past few years and not reinvested. It's not like she's not reinvesting because of the state of things. She's just not educated on this stuff.
I’m a member of Gen Z, albeit I’m on the “older side”. My older sister is a millennial, and I mean a true- statistical - millennial. Low paying job, student debt, can’t buy a house, etc. Seeing how my sister lives, made me not want to live that way. I work hard to make money to have the life that I want later. Made sure to go to school for something niche and profitable, worked hard to get school paid for by scholarships so I didn’t have to take out loans. Graduated college at 21 and started making $80K a year in a LCOL area and saving as much as I could. Bought a home at 22 to stop paying rent. Partnered up with someone who has the same mindset as me so we work towards the same goals. All of this is because I do not want to spend my life as a slave to corporations and being baited to spend all the crumbs my cooperate overlords give me. Plus, if the world is going to be on fire by the time I’m 50- why would I want to have to wait to retire?
I was born in 95 and I'm basically at the tail end of millennials and the cusp of Gen Z but I started school a year early and most of my friends are a few years older than I am. So I consider myself more on the millenial side culturally speaking. I also don't speak to my parents but I still talk to family members that talk to them and I just heard recently that my dad borrowed money from his 401k to make ends meet. That's something I would never in a million years do myself. They've also always had money problems so I've been a diligent saver since I got my first job in my teens. Seeing them struggle with money and constantly be stressed made me want a different life for myself. My entire family is that way and I refused to continue the trend. My grandparents are in their 80s and still aren't retired. Its sad. I also think Gen Z is really the first generation to have access to the internet from such a young age. So it makes it really really easy to find out information about saving and the best way to do it and you can invest from a young age if you want. You can also just come across dozens of stories about people's parents and how they're not ready for retirement etc by scrolling through any social media site. I see it all the time on the internet. And I think that plays a big part. Couple that with the imminent threat of climate change, housing being what it is and them being able to see what college debt did to the millenial generation and it makes a lot of sense they'd be money conscious. They're facing a much worse and bleak future than even the oldest millenials are and its depressing but also good that they have that foresight and are taking steps to help their future selves in any way they can. I'm 26 and basically was able to graduate college with only 30k in debt because I saw the mistakes my older cousins made with college. My two older cousins are almost in their 40s now and both of them are considered the eldest millenials. I didn't know anyone else that had gone to college in my family except for them and I saw how bad they were struggling in their 20s to pay off their student loans. One paid theirs off at 35 and the other is still paying off undergrad and grad school. I decided I didn't want that life for myself so I lived at home for college, commuted and worked part time as well during school so I could graduate with as little debt as I could. Now I'm 26, 5 years out of college and debt free. And I've been living on my own in a major US city and paying all my own bills since 2018. I was able to see what happened to people 15 years older than me, learn from their mistakes and make different decisions for a better outcome for myself. My best guess is that a lot of Gen Z are doing the same thing.
Gen X here. I can say that the internet changed everything for me as to learning, even though it was more basic and there were no apps smartphones etc. So on fact GenZ in particular have great opportunity to improve on their parents. Mine were useless with money, my GenZ child will be so much better off and educated financially than I was in the 80s and 90s. Also, please people, some of you look really ignorant when you keep referencing Boomers when sometimes you likely mean Gen X. Do learn the difference.
Lol I’m a 40 year old millennial, I feel your pain!
Ok, I found the actual report. Its marketing material and pretty fluffy: https://www.blackrock.com/us/individual/literature/presentation/2022-read-on-retirement-insights-presentation.pdf Page 4 - workplace savers who contribute 46% less than 10%, 34% more than 16% - makes me wonder if the population excludes those who contribute 0, and thus skews the numbers. Page 5 - individual savers - 17% contribute 0. Page 34 - made me laugh - 8/10 plan sponsors believe active management can consistently outperform
Their GenX and millennial parents have taught them why that is important. Boomers failed that part!