YORK, Pa. — A Bankrate survey showed nearly one in three Gen Z workers are not actively saving for retirement, and the number of people who feel they’re behind increases by the generations.
Gen Z includes ages 18 to 25; Millennials include anyone ages 26 to 41. James Royal, a principle writer at Bankrate, said as Americans get older, more of them felt behind.
“For Gen Z, about 30% of them said they were behind in retirement savings… well that number went up for millennials, that number was even higher for Gen X and when you got to baby boomers, 71% of them felt behind in retirement,” said Royal.
FOX43 talked to Pennsylvanians who fell into the Gen Z and Millennial categories about the survey to if they felt they were behind.
Few said they were saving, but many also felt they were trying to catch up.
“I’m falling short, I need to catch up and I have kids I’ve got to travel to see,” said Kara Reisser. “My son is in the Marines; it’s a lot of traveling that’s hindering me a little bit.”
Taylor Jones, gym coach at PA Fitness, said that she feels she is on track and looks at retirement as an investment in her future. Although, the investment is worth a few sacrifices as she had to cut back to save a few dollars.
“I had to cut some things, look for cheaper options, or maybe buy store brand to make up for that {cost} but my job right now is performance-based, so if I need to make more money I can just perform a little better,” said Jones.
Royal said many Gen Zers and Millennials are not investing due to the rise in cost, student loans and not being in their professional careers. The survey says other contributing factors are:
Inflation or higher cost of living: 43%
New expenses: 36%
Intent to keep more cash on hand: 35%
Stagnant or reduced income: 24%
Market volatility: 23%
17-year-old Brendan Steinfelt is currently applying to colleges and plans on majoring in cybersecurity. He is employed, but Steinfelt says he is focusing on the things that are most important to him at this time in his life.
“I feel like right now I could be spending it on a lot more important things like gas because it’s so expensive, school… that’s coming up for me so I don’t think retirement is what I need to be worried about right now,” said Steinfelt.
Steinfelt said that he knows saving for retirement is important but it’s not something he feels he should worry about right now.
Julia Reed, a licensed practical nurse (LPN), said at the start of the pandemic she saved up enough money but still feels like she is behind.
“I feel like the beginning of it I got ahead a little bit because I work in healthcare so there was a ton of overtime and a ton of bonuses, but now with everything else I haven’t been able to get ahead,” said Julia Reed.
Currently, Reed still has student loans from her first nursing program and is returning to school to become a registered nurse (RN). Reed said that she is paying for her RN degree out of pocket to prevent taking on more debt.
“When I’m done with school then I’ll go to my forever job,” said Reed. “Even though my employer does put stuff in towards retirement, there’s no room for growth for me there so at the end of the day it’s not going to follow me into retirement, but I do plan on looking into retirement plans with my future employer when I graduate.”
According to the Bankrate survey, Americans who aren’t actively saving can miss out on hundreds of thousands of dollars.
“At just saving $5,000 a year, a little less than $100 a week at below average returns for the stock market, you can build up $1.3 million over a four-year investment career,” said Royal.
In the survey, it states, “For a worker who starts investing at age 22 and reliably invests $5,000 and earns an 8% return over a 40-year period, those contributions would turn into about $1.295 million at age 62. For the worker who waits just 10 years, until age 32, that same contribution leads to $566,000 or so – a difference of more than $728,000! That’s the cost of waiting only a decade.”
Jill Demarco, a coach at PA Fitness, falls into the Millennial category and is actively saving for retirement. She says the reason she saves is that she is a single mother and wants to secure her and her child's future, but similar to the survey, she also feels like she is falling behind.
“I’m currently contributing enough to retire with where I want to, but I definitely would have to save more than if I would have started 10 years ago,” said Demarco.
Royal said it’s never too late for anyone to get started with a 401k or Brokerage account. The money put into these accounts will compound and build over time. Royal said it can be as little as $10 and that will make more of a difference than not saving.
“Don’t beat yourself up if you can’t save this month of this year,” said Royal. "Resolve to make it a priority as soon as it’s possible and to get on track."
For a detailed breakdown of the survey and how to save, click here.