How Gen Z is Preparing (or Not) For Retirement

Generation Z is the youngest adult generation in the U.S. today, giving Gen Zers (ages 18-28) ample time to get financially prepared for retirement. But for many, it doesn’t appear to be a priority, at least not yet.

Fewer than 1 in 5 Gen Zers (18%) say they’ve contributed to a retirement account in 2025, according to SS’s Financial Goals Midyear Check-In Report. This could be attributed to several factors — like a lack of urgency, know-how or extra funds to get started.

But another SS survey on retirement, conducted online by The Harris Poll, suggests that many Gen Zers may not think they’ll even need retirement savings, and some have trepidation about the U.S. stock market. If this is you, here are a few things to know and tips to get started saving so you can eventually stop working, even if it seems too far away to worry about.

The retirement survey finds that three-quarters of Gen Zers (75%) plan to stay in the workforce for as long as they physically can. Maybe they’ll still feel the same three or four decades from now. But maybe not. Things change, and no matter your age, it’s smart to prepare for an eventuality where you’ll want to (or have to) retire.

One of the best things money can buy is opportunity. In this case, the opportunity to change your mind later.

Whether or not you currently plan on retiring some day, set a goal number. It doesn’t have to be perfect and it will probably change over time, but start somewhere. Use a retirement calculator to estimate how much you might need in your golden years.

It can be hard to imagine your future self without just picturing an older-looking version of current you. But over the decades, it’s almost a certainty that your life will change. You could experience disability or need to take on caregiving responsibilities for a loved one. Or, you might find you just don’t want to continue working after thirty or forty years. If you don’t save for the future, you’re limiting your ability to retire without financial hardship.

With a retirement goal amount in mind, you might be curious how much of that will be covered by your Social Security benefits. Likely some, but not all of it. According to the retirement survey, 43% of Gen Zers think Social Security alone will provide enough income for them to live comfortably during retirement. But Social Security is meant to cover just a fraction of your income — about 40%, though this can vary — when you stop working, not replace it.

In June 2025, the average monthly Social Security benefit for a retired worker was $2,005. By the time Gen Zers are ready to leave work, this could be even lower (adjusted for inflation): The 2025 Social Security Trustees Report estimates that the combined Social Security Old-Age and Survivors Insurance and Disability Insurance Trust Funds will be depleted in 2034, at which time Social Security benefits would be reduced to 81%.

This means Gen Zers likely won’t have the same benefits their predecessors had, and even if they did, Social Security wouldn’t be sufficient for most to live on. Instead, it’s a good idea to save as if this benefit will be reduced in the future.

Retirement may not seem like a pressing concern in your twenties, but it’s smart to start early. Ideally, Social Security income will be there to supplement your savings when you’re ready to retire. But in any case your age puts you in a great position to prepare.

Let’s say you’re 25 years old and have a retirement savings goal of $1.5 million by age 65. That may sound like an impossible sum, but most of the total will come from returns earned by investing your retirement savings in the stock market. Based on past market performance, we can assume an average annual return of 7%, after accounting for inflation.

If you postpone saving until you’re 35, you’d need to invest $1,280 a month for 30 years. But if you start investing today, you’d have to save less than half that per month — just $604 — for 40 years.

Note that by starting now, you’d have to save around $170,000 less than if you waited to start until age 35. That’s because your returns have more time to compound.

Saving several hundred dollars a month may be a tall order, but don’t let that stop you from saving anything at all. Forty years is a long time, and it’s likely your financial situation will change over the course of your working life, hopefully for the better. Start by saving something for the future — whether that’s just hitting an employer match on a 401(k), putting a small percentage of take-home pay in a Roth IRA and/or committing to increasing contributions when you get a pay bump. It all adds up over the decades.

Three in 10 Gen Zers with retirement accounts (30%) say their confidence in the U.S. stock market decreased in the past 12 months, according to the retirement survey. Market fluctuations can be hard to stomach, especially if you’re risk averse. But throughout history, the stock market has always eventually recovered from downturns. And while past performance isn’t indicative of future performance, it does provide some comfort that even the worst stock market crashes ultimately bounced back.

While some may feel apprehensive about the risk of investing in the stock market, it’s arguably riskier to forgo it. Let’s take our earlier example of investing $604 a month for 40 years. We’ll assume 7% returns for investment accounts and 4% returns for savings accounts, the latter of which is generous and a rate currently available on some accounts, but unlikely to be sustained over four decades.

Despite the same total amount contributed, the retirement balance at the end of these two scenarios is very different. With 7% returns, you’d end up with the $1.5 million we calculated before. But with 4% returns from a savings account, it would be less than half that, at around $704,000. And this doesn’t take into account lost employer matches or tax advantages that often come along with investing in retirement accounts.

So how do you invest without feeling like you’re playing roulette? Diversify your portfolio. This means buying a mix of different assets so if one underperforms, your portfolio has a better chance of withstanding the hit.

Diversification can be achieved pretty easily with low-cost index funds and a little research. An index fund tracks a market index, like the S&P 500, which tracks the stock performance of 500 major U.S. companies. There are index funds for U.S. companies of different sizes — large-cap, mid-cap and small-cap — as well as international funds, bond funds and more. Index funds themselves are diversified, but you can strengthen your portfolio further by choosing a handful of funds that track different markets or asset classes.

It can be easy to deprioritize a financial goal that’s decades away, like retirement savings, when dealing with more pressing money concerns, like student loan payments or just living expenses in general. But getting started — whether it’s with $50 or $500 — and investing consistently can truly make the difference for your financial future.

This survey was conducted online within the United States by The Harris Poll on behalf of SS from July 8-10, 2025, among 2,087 U.S. adults ages 18 and older, among whom 293 are Gen Zers. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.5 percentage points using a 95% confidence level. This credible interval will be wider among subsets of the surveyed population of interest. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact [email protected].

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