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Survey finds one third of Gen Z avoiding retirement savings

Remember when retirement funds were a given? According to a new study, more Gen Zers are avoiding saving for old age and not thinking about their finances long-term.

A new report from Bankrate says that 31% of Gen Z have not invested in their retirement savings over the last two years.

This is a higher rate than older generations. 23% of Millennials aren’t saving, and an overall average of 24% of US workers are following this trend. These numbers include full-time or part-time employees, as well as temporarily employed workers.

In addition, 55% of Americans said they felt ‘behind’ on their retirement savings. This figure rises with age.

Interestingly, Gen Zers who are investing into their retirement funds are putting more cash away this year than last. 30% said they’d contributed more in 2022, with only 10% admitting they’d decreased their investment within the same time period.

What could be causing a shift in saving habits with younger people, you may be asking? The main reasons shouldn’t come as a huge shock, especially if you’re an avid Thred reader.

Gen Zers who were surveyed said that the main cause for holding back on personal long-term investment was inflation and higher costs of living. With spiralling energy, food, and fuel prices, our money simply isn’t going as far, leaving less room for genuine budgeting and sensible saving. 43% cited this as a major factor.

Other causes included new expenses, intent to keep more cash on hand, stagnant or reduced income, and market volatility.

36% of Gen Z said new expenses held them back financially, the most of any age group. This may be due to only recently entering the work force, independently managing money, and paying for things like rent and groceries.

The survey was conducted via phone, and reached 2,312 people. Of these, 167 were considered to be part of the Gen Z cohort.

Of course, it’s always a good idea to save money into a retirement fund where you can and if it is affordable to you. For many young people, they do not earn enough yet to consider a pension. There may also be other external factors to ponder too, such as a looming climate crisis and frequent economic turmoil.

For some, expecting anything to operate like it does today in 2050 and beyond may feel fanciful. Judging the state of things, is it any shock that young people aren’t too worried about the long-term future financially? Nihilism is a common Gen Z trait, after all.

It will be interesting to see whether these stats change in the coming years, particularly as Gen Z becomes a larger part of the work force.