Brynnley Beckman is only 23, but she is already thinking about retirement.
She teaches ninth grade biology at the Shelton School in Dallas and contributes 3 percent of her salary to an employer-sponsored retirement fund. She hopes to increase her contribution by 1 percent each year.
“I wanted to start saving early because the more the money sits, the more it compounds, the more it’s going to grow,” Ms. Beckman said.
Like many of her peers in Generation Z, defined roughly as people born from 1996 to 2012, Ms. Beckman is motivated to save. According to a 2024 report from TIAA, which provides retirement planning services for employees in the education, health care and nonprofit sector, 20 percent of Gen Z-ers are saving for retirement. They’re also contributing to 401(k) plans at higher rates than millennials did when they first entered the work force, according to a 2023 Vanguard study.
“Gen Z in general, and in particular women, are starting to get an understanding that the more that you save and invest, the more agency and freedom you have over your life,” said Ryan Viktorin, a certified financial planner and financial consultant at Fidelity Investments.
Financial independence later in life is Ms. Beckman’s main motivation for putting money into a 403(b) plan, which is similar to a 401(k) but typically offered by public schools, nonprofits and religious institutions. “I could retire at the age that I want to, rather than working later, and have financial freedom and security,” Ms. Beckman said.
Why is Gen Z better at saving?
Financial experts credit Gen Z’s ability to save more at a younger age to a policy changes and technological advancements.
A provision in the Secure 2.0 Act, which took effect in late 2022, mandates that eligible employees be automatically enrolled in new 401(k) and 403(b) plans, with the ability to opt out. “Default enrollment and contributions really skirt around that human behavior component and just gets people started early,” said Melody Evans, a wealth management adviser at TIAA.
The Secure 2.0 Act also requires plans to offer contribution escalation — the option to increase contributions by at least 1 percent annually until at least 10 percent of an employee’s salary is being saved. For workers like Ms. Beckman, who are still at least 30 years from retirement, these features can reduce the likelihood by 60 percent that they will run out of money during retirement, according to a recent study by the Employee Benefit Research Institute.
Budgeting apps, personal finance podcasts and webinars have also helped Gen Z better understand the basics of saving and investing. Since 2020, 18- to 35-year-olds have made up 64 percent of new users of the micro-investing app Acorns, according to a company spokeswoman. For Robinhood, a stock trading app, 75 percent of customers are Gen Z or millennial, said Ally Liss, a product communications manager.
Some of the financial literacy and investing podcasts specifically aimed at Gen Z are Money Moves, How to Money, the Money With Katie Show and More Money. Gen Z is also more likely to discuss finances and investment strategies with their peers, said Ms. Viktorin — as well as artificial intelligence.
Christopher Lind, a 25-year-old IT business analyst in Palm Beach County, Fla., says he often turns to Gemini, Google’s A.I. chatbot, for a better understanding of retirement and taxes. “I ask A.I. a lot of questions regarding this stuff because I think it’d be impossible to know all of it unless you do this for a living,” he said.
No matter the tool, the focus on financial literacy is working. In 2022, 39 percent of 23-year-olds owned stock versus 31 percent of 23-year-olds in 2007, according to Ana Hernández Kent, a senior researcher at the Federal Reserve Bank of St. Louis. Stock balances for Gen Z were also higher, with a median of $4,400 versus $3,900 for millennials. “While these differences are small, the earlier start for some Gen Z households can translate into more powerful compound earnings,” Ms. Kent said.
The internet taught Gen Z about I.R.A.s.
More young people are contributing to an individual retirement account, in addition to their 401(k), said Nilufer Gok, a research manager at the Center for Retirement Research at Boston College. Of those who contribute to an I.R.A. or Roth I.R.A., 41 percent were under 40 in 2022, up from 28 percent in 2016, according to data from the center. (Anyone under the age of 50 with earned income can contribute up to $7,000 to a traditional or Roth I.R.A. in 2025.)
That trend could be attributed to fintech platforms, which have promoted these savings vehicles and made it easier to open them, Ms. Gok said. Search “young people and I.R.A.” on YouTube, TikTok or Reddit and there is no shortage of content saying that opening an I.R.A. can help you retire sooner.
Mr. Lind opened his first Roth I.R.A. at 22. He estimates he’s saving about 21 percent of his six-figure salary for retirement by contributing the maximum amounts to his Roth I.R.A. and his 401(k), which is well above the average savings rate of 14.1 percent, according to Fidelity.
“I just really wanted to utilize the time that I have for investing,” Mr. Lind said.
In addition to saving for retirement, Mr. Lind also engages in riskier investments, like buying cryptocurrencies and day trading. Using Robinhood, he started investing in crypto at 18, which isn’t unusual. According to a 2024 Pew Research Center survey, 42 percent of men ages 18 to 29 have invested in crypto, versus 17 percent of women in that age group.
Gen Z women have a leg up on retirement savings, for now.
The TIAA report showed that more Gen Z women (54 percent) were saving for retirement in 401(k)s than Gen Z men (44 percent).
Ms. Viktorin said that number was “very, very encouraging” for Gen Z women. Historically there has been a gender gap in retirement savings, with women having about 30 percent less money in retirement than men. But if Gen Z women continue to save at this rate, the gap could start to close, she said.
“It’s exciting to see that women are saving just that little bit more than their male counterparts,” Ms. Evans said. However, she added, if these Gen Z women go on to become caregivers for their children or aging parents, that could reduce their ability to save.
Taking time off to be a caregiver for a child or parent is a primary reason women save less for retirement, on average. When women return to the work force, many are self-employed or take lower-wage, part-time jobs. That leaves women with less to save for retirement.
Gen Z men invest more outside their retirement accounts.
Gen Z men are more comfortable investing because many have been buying and selling stock on the Robinhood app for years, said John Darby, an associate at Graham Capital Wealth Management in Tampa, Fla. “They probably opened up a Robinhood account on the first day that they turned 18, so they have an increased appetite for risk,” Mr. Darby said.
He speaks from experience: Mr. Darby, 26, opened a Robinhood account when he turned 18. “It definitely helped me learn a little bit more about trading,” he said. Only about 37 percent of investors on Robinhood self-identify as women, according to Ms. Liss.
Many Gen Z men have been paying close attention to the markets ever since the Covid-19 pandemic, Mr. Darby said. During the early days of lockdown, buying and selling meme stocks like GameStop on Robinhood turned some into overnight millionaires (though others caught up in the mania lost big). And after plummeting in the early days of the pandemic, the S&P 500 soared to new highs.
While Gen Z women are getting better at investing, they tend to be a bit more cautious than men. For instance, many of Mr. Darby’s young female clients have expressed concern about the jittery stock market, compared with his young male clients.
Mr. Lind said he viewed the drop in the S&P 500 in April “as a buying opportunity.”
Which strategy will prevail?
Because Gen Z women favor more conservative financial vehicles, such as 401(k)s and I.R.A.s, there is some possibility that Gen Z men’s investments will result in higher yields, causing the gender wealth gap to widen.
But given that Gen Z men make more aggressive investments outside their 401(k), including in crypto, it will all come down to the markets over the next couple of decades.
“Imagine that we do have a long-term bear market,” Mr. Darby said. In a slow-growth environment, Gen Z women’s 401(k) contributions could surpass what men earn with riskier investments, he said.
Ms. Beckman, the teacher who puts aside 3 percent in her 403(b), says she and her husband are being cautious with their retirement savings for now because they’re also saving up for a house and recently had some unexpected expenses.
“I will add more as our financial situation changes,” she said. “I understand that with compounding interest, the best thing we can do for ourselves is start saving early.”
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