The submissions on the financial traits of workers in the Generation Z age group seem to be starkly contrasted.
However, while some studies say that most adult youths are slow to save, some other ones suggest that people in this group, particularly the women, are confident of how things will play out financially after retirement.
Gen Zs Attaining Ages of Accountability
Quite a sizable number of Gen Zs have become adults and are already making a living. Still, financial experts are concerned about their financial security.
However, these young adults are not as worried as the experts predicting a tumultuous future for them. Instead, overcoming the many existential crises seems to be the average Gen Z’s priority.
The Fuel of Young Adults’ Financial Confidence
In 2023, Northwestern Mutual conducted another annual round of study in which they tried to assess the attitudes of US adults to financial decision-making.
Northwestern Mutual’s study, tagged Planning and Progress, found that 65% of Gen Zs are confident that retirement will meet them prepared. This level of optimism is much higher than that of older generations.
Financial Humility Among Older Generations
For example, baby boomers, Gen X, and Millenials have only 52%, 45%, and 54%, respectively, believing that they would be financially secure by retirement.
Also, Northwestern Mutual found that Gen Z women have a relatively higher confidence level than other generations concerning their post-retirement finances. Women generally tend to be skeptical about their finances, but not Gen Zs.
Gen Z Women are Financially Bolder
Well over half of every Gen Z woman, about 59% of them, claim they would be financially ready when it’s time to retire. Meanwhile, just 48% of baby boomers, 38% of Gen X and 43% of Millenials are confident that they will be financially secure by retirement.
However, the study does not end there, as Northwestern Mutual tried to get some context of the data.
Planning and Openmindedness
The 2023 Planning and Progress study was conducted by interviewing 2,740 US adults between February 17 and March 2. Participation in the interview was voluntary, and the participants were asked generic questions about their finances.
The study found that a positive attitude towards planning and an anticipation of likely eventualities, is the key to the financial confidence of younger generations.
Identify your Generation
For clarification, Gen Z are people born in 1997 or later; Millenials are those born between 1980 and 1996; Generation X were born after World War II, between 1960 and 1980. Finally, Baby Boomers were born between 1946 and 1960.
Of all these different generations of adults, Gen Zs are the most likely to seek financial advice and to also follow through with it.
No Holds Bar
Veronica Fuentes is the managing director at Northwestern Mutual and a certified financial planner. She believes that Gen Zs have no restrictions on information that other generations would call personal life details.
According to Fuentes, “They will say anything that is on their minds, and they will ask any questions. They’re just open to people guiding them in the right direction, and they’re not scared to ask for help.”
We Love Guidance
Fuentes said Gen Zs are more open to financial advice and are more likely to make wise investment decisions. When an expert recommends a change to their financial plan, Gen Zs are more likely to follow through.
However, that does not mean they consume all financial information encountered hook, line, and sinker.
The Discerning Generation
By implication, Gen Zs are sharp-witted about vetting financial information. For example, certified financial planners have discovered from consultation sessions that the average Gen Z is likely to prod financial information from social media or online with a stick.
Clifford Cornell, a certified financial planner and a member of Gen Z, has some insights into how the minds of people in his age group work.
Financial Information on the Tip of Your Fingers
According to Cornell, social media has become a front through which many people interface with various forms of information more than ever before. In addition, social media sometimes affords a means of getting feedback and clarification on some of this information.
This makes financial information more accessible to Gen Z than other generations.
Make It Count
So, Gen Zs are naturally at an advantage to make appropriate use of financial insight. Unlike older generations who had to go to great lengths, and at great expense, to have access to similar information as Gen Zs.
Likewise, Gen Zs have mastered the art of gleaning useful information and equally have the advantage of having time on their side.
We Are Without Worries
Cornell said of this ability, “Our ability to use those tools to our advantage … really gives our generation a leg up. Older generations didn’t really have those tools to use to their ability.”
So, this observed openness of Gen Z women to confer with experts about finances is the probable key to their inability to lose sleep over retirement.
The Saving Habit Is Way Important Than the Amount We Start With
In the study by Northwestern Mutual, Americans say they have a nine out of twenty (9/20) chance of outliving their retirement benefits. Still, one out of three Americans do not even have a retirement plan.
So, Fuentes advises that everyone should try starting a retirement savings as early as possible. Putting aside just $50 monthly, what some will consider a miserly sum, is better than nothing at all.
Helpful Steps to Follow
You can motivate yourself to consistently save for retirement by regularly reviewing your plan. Doing so will help you adjust accordingly to meet your target or to retire even earlier.
Also, endeavor to improve your annual savings year after year. Earnestly try to challenge yourself at the start of each new year, even if it’s just an increase of 1% in the amount you save.