How Gen Z is preparing (or not) for retirement

Published On: August 25, 2025

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Gen Zers (those between the ages of 18 and 28) have plenty of time to prepare financially for retirement because they are currently the youngest adult generation in the United States. However, it doesn’t seem to be a priority—at least not yet—for many.

According to the NerdWallet sFinancial Goals Midyear Check-In Report, less than one in five Gen Zers (18%) report having made contributions to a retirement account in 2025. This could be caused by a number of things, such as a lack of urgency, expertise, or initial funding.

However, according to another online NerdWallet survey on retirement by The Harris Poll, some Gen Zers are afraid of the US stock market, and many may not even believe they will need retirement savings. If this sounds like you, here are some things to consider and some advice on how to begin saving so that, even if it seems far off, you can someday quit working.

Many Gen Zers plan to work indefinitely

According to the retirement survey, 75% of Gen Zers intend to continue working as long as their bodies allow. In thirty or forty years, they might still feel the same. Perhaps not, though. No matter your age, it’s wise to plan for the possibility that you may want to (or must) retire since things change.

What Gen Zers can do: Allow yourself to change your mind and set a goal

Opportunity is among the best things that money can purchase. In this instance, the chance to reconsider later.

Set a goal number regardless of whether you currently intend to retire at some point. Start somewhere, even if it’s not ideal and will likely evolve over time. To determine how much you would want in your later years, use a retirement calculator.

It can be challenging to envision your future self without merely seeing an elderly version of yourself. However, it’s nearly a given that your life will alter over the years. You can become disabled or have to take on a loved one’s caring duties. Or, after thirty or forty years, you may decide that you simply do not want to work any longer. You’re restricting your chances of retiring comfortably if you don’t invest for the future.

More than 2 in 5 Gen Zers think Social Security will be enough

You may be wondering how much of your retirement goal will be supported by your Social Security benefits. Not all of it, but probably some. 43% of Gen Zers believe Social Security alone will give them enough money to live comfortably in retirement, per the retirement poll. However, Social Security is not intended to replace your income; rather, it is only supposed to cover a small portion of it, roughly 40%, though this can change once you quit working.

In June 2025, a retired worker’s average monthly Social Security payout was $2,005. This could be considerably lower (adjusted for inflation) by the time Gen Zers are prepared to quit their jobs: According to the 2025 Social Security Trustees Report, Social Security benefits would drop to 81% in 2034 when the combined Social Security Old-Age and Survivors Insurance and Disability Insurance Trust Funds are exhausted.

As a result, Gen Zers are unlikely to receive the same benefits as their forebears, and even if they did, the majority would still need Social Security to survive. Rather, it’s wise to save as though this advantage would be diminished in the future.

What Gen Zers can do: Start saving now

In your twenties, retirement might not seem like a top priority, but it’s wise to start early. When it’s time to retire, you should ideally have Social Security income to augment your savings. In any event, you are in an excellent position to prepare because of your age.

Assume you are 25 years old and want to save $1.5 million for retirement by the time you are 65. Although that might seem like an unachievable amount, the majority of it will come from profits from stock market investments made with your retirement funds. After taking inflation into consideration, we can forecast an average yearly return of 7% based on historical market performance.

You would need to invest $1,280 per month for 30 years if you put off investing until you are 35. However, you would need to save less than half that amount each month—just $604 over 40 years—if you started saving today.

Keep in mind that starting now would need you to save around $170,000 less than starting at age 35. This is because you have more time for your returns to compound.

It may seem impossible to save several hundred dollars a month, but don’t let that deter you from making any kind of savings. It’s likely that your financial status will improve during the course of your working life, and forty years is a long time. Start investing for the future by contributing a small portion of your take-home pay to a Roth IRA, matching your employer’s match on a 401(k), or pledging to increase your contributions when your pay increases. Over the years, everything adds up.

Some Gen Zers have trust issues with the stock market

According to the retirement poll, 30% of Gen Zers who have retirement savings report that they have lost faith in the US stock market over the last 12 months. It might be difficult to tolerate market swings, particularly if you’re risk averse. However, the stock market has always bounced back from downturns in the past. Even the biggest stock market crashes eventually recovered, which gives some consolation even though previous performance isn’t a reliable predictor of future performance.

>>MORE: How to Respond to a Stock Market Crash

The risk of stock market investment may make some people nervous, but it’s probably scarier to avoid it altogether. Let’s use the $604 monthly investment from our previous example, which was made for 40 years. We’ll assume that investment accounts would yield 7% returns and savings accounts will yield 4% returns. The latter is a generous rate that is currently offered on certain accounts, but it is unlikely to be maintained for a forty-year period.

The retirement balance at the conclusion of these two scenarios differs significantly, even though the overall amount deposited is the same. You would receive the $1.5 million that we previously calculated with 7% returns. However, it would be less than half that, at about $704,000. This is based on 4% earnings on a savings account. Additionally, this does not account for missed company matches or tax benefits that are frequently associated with retirement plan investments.

What Gen Zers can do: Diversify and trust the process

How can one invest without feeling like they’re playing a game of chance? Make your portfolio more diverse. This entails purchasing a variety of assets so that your portfolio will be more resilient in the event that one underperforms.

With a little research and inexpensive index funds, diversification is rather simple to accomplish. A market index, such as the S&P 500, which monitors the stock performance of 500 significant American corporations, is tracked by an index fund. In addition to overseas funds, bond funds, and other options, there are index funds for U.S. corporations of all sizes, including large-, mid-, and small-cap companies. Although index funds are diversified in and of themselves, you may make your portfolio even more robust by selecting a small number of funds that follow other asset classes or markets.

>> MORE: Portfolio Diversification

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.

The complete survey methodology is available in theoriginal article, published at NerdWallet.