Jul 31, 2026
Follow us on Google for more Moneywise news
Add us on GoogleIf you think Gen Zers throw their money into frivolous purchases, sports gambling and risky investments like crypto and prediction markets, you’d be right. You’d also be wrong.
It depends on which Gen Zer you’re talking about. Sure, there are plenty of young “financial nihilists” who figure their future looks bad so they may as well spend money in the here and now.
Advertisement
But there are just as many focused on building a secure financial future. While less responsible peers max out credit cards, they’re “retirement maxxing.”
Thanks for subscribing!
Retire on your terms — we'll show you how.
By signing up, you accept Moneywise Terms of Use, Subscription Agreement, and Privacy Policy.
Take Fort Lauderdale’s Natalie Baddour, 26, featured in a Bloomberg story about the trend. She’s furiously saving money — $300,000 so far — towards retirement.
“It was always really important for me to try to get ahead while I was young,” Baddour told Bloomberg. “I always saw it as the key to getting to have the life that I want.”
Baddour is part of a generation that began saving and investing in retirement accounts as early as 19 years of age — more than a decade earlier than many Gen X or Boomers did.
By 2024, Gen Zers had three times as much invested in 401(k)s and other retirement accounts as Gen Xers at the same age. Young people are starting even earlier today. According to a 2026 Charles Schwab survey, teens as young as 13 are interested in investing.
Here’s how Natalie and her peers are managing to save money in tough times and what’s behind the retirement maxxing trend.
Gen Zers in their 20s are already saving for retirement
As the World Economic Forum reports, Gen Zers are struggling with higher rates of unemployment, low wages and a high cost of living, particularly housing. Saving takes incredible effort, especially In Fort Lauderdale, where rent is 77% higher than the national average.
Yet Baddour squirrels away 50% of every paycheck she gets from her job at the pet supply company Chewy Inc. She also keeps herself on a tight leash with a monthly budget. She splits rent with a roomie, eats at home most of the time and drives a car that’s almost as old as she is.
Her fellow Gen Zer Grace Colvin, 26, is an equally conscientious saver who has socked away $100,000 to date. The Chicago management consultant told Bloomberg that building greater financial independence is as much a cushion for her career as her retirement.
Advertisement
“I might not leave my job necessarily, but I’m going to say no to things that I simply don’t want to do,” she said. “You’re not as tempted by the ‘golden handcuffs’ anymore.”
She added that she sees two sides of the same coin in Gen Z’s divergent approach to money, with the nihilists on one side and savers on the other.
“They’re both just Gen Z responses to the same economic anxiety,” she said.
Baddour and Colvin’s highly focused approach to saving dovetails with another Gen Z trend — dubbed ‘Underconsumption Core’ on TikTok, a form of conspicuous non-consumption. Others might simply call it frugality.
According to PwC, between January and April 2025, Gen Z reduced their spending by 13% while other generations increased theirs.
Advertisement
Must Read
- The ultra-rich use these 5 real estate strategies to build wealth while they sleep — you can start with just $100
- Here’s the average income of Americans by age in 2026. Are you keeping up or falling behind?
- Insurance companies profit most from drivers who auto-renew without shopping around. Comparing 100+ quotes takes 2 minutes and costs nothing
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
The danger of building nest eggs only to raid them
The sad truth is that many Gen Zers have no choice but to be frugal. It’s not just about saving for retirement. They are saddled with incredible levels of debt — $94,101 on average, much of that being outstanding student loans.
That means the very Gen Zers that are saving earnestly for retirement may end up raiding their nest eggs to cover bills. According to a CNBC article, 42% of Gen Zers who built up retirement accounts dipped into them to cover their debt.
There’s nothing wrong with investing in a 401(k)s as a first step towards financial security, particularly if your employer offers a contribution match. In fact, the financial services company Empower encourages it. Not only is it an automated savings tool but it offers a guaranteed return thanks to that employer match.
But Empower suggests that setting up a 401(k) should be just one of several steps toward financial security — and that the process takes time, including:
- Gradualling building up an emergency fund to cover sudden financial crises (like a job loss), with up to six months’ worth of expenses
- Paying off high-interest debt, particularly credit-card debt — as high interest wipes out savings efforts
- Creating a “sinking fund” for expected expenses, like holidays or home maintenance
- Bolstering long-term retirement accounts — adding to 401(k)s and funding a Roth IRA
- Investing in life goals like saving for a down payment on a home
The retirement-maxxing Gen Zers are ahead of the game in many ways. If they can be as conscientious about paying off debt as they are saving, they’ll be in even better shape.
You May Also Like
- JP Morgan sees gold hitting $6,000/oz before 2027 — and a Gold IRA lets you hold the physical metal while deferring the tax bill. Get your free guide from Priority Gold
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Millionaires under 43 are reshaping investing — just 25% of their portfolios are in stocks. Here’s where their money is going
Laura Boast is a Senior Reporter with Moneywise.com and a lifelong content creator who has reached international audiences at Discovery, CBC, Blue Ant Media, Bond Brand Loyalty and more.
