The Currency’s Wealth Watch series tracks the distribution of American wealth against the backdrop of saving trends, investing patterns, and financial market conditions. 

Key takeaways

• Pooled together, Gen Z and Millennials allocate 27.3% of their retirement savings to Roth IRAs — even as 401(k)s remain dominant by total dollars.
• As of July, Gen Z saw a 22.5% year-over-year increase in average Roth IRA balances, while Millennials were up 6.1%.
• Empower data suggests young generations are holding steady when it comes to market volatility, with Roth IRA balances rebounding following April declines.

Younger generations are steadily allocating a meaningful share of their retirement savings to Roth IRAs, according to Empower Personal Dashboard^TM data. As of July, Roth IRAs account for 33.3% of Gen Z’s retirement savings and 25.2% of Millennials’ — a breakdown that has remained consistent since 2022 and reflects the sustained role Roths play in young investors’ portfolios.

This shift comes as Empower research shows Gen Z and Millennials are spending nearly five hours a day thinking about money — more than any other generation — and checking their accounts more frequently than their older peers.*

Read more: Young investors turn to Roth IRAs for retirement planning

The Roth advantage

According to Empower data, over half of Millennials (57.9%) and Gen Z (55.7%) are utilizing Roth IRAs, reaffirming Roths as an essential part of the retirement planning toolkit. Roth IRAs can be especially appealing to younger savers, who are generally more likely to be within the income limits to contribute. For 2025, individuals earning less than $150,000 (or $236,000 for married couples filing jointly) are eligible to contribute the full amount of $7,000. Making post-tax contributions can be a tax-smart long-term strategy, since younger savers may expect to be in a higher tax bracket later.

That participation is translating into real growth. Gen Z saw a 22.5% year-over-year increase in average Roth IRA balances, rising from $25,875 in July 2024 to $31,695 one year later. Millennials experienced a 6.1% increase over the same period, climbing from $64,440 to $68,400.

Stacking strategies

Even as Roth IRAs grow, 401(k)s remain the dominant retirement savings vehicle across generations. Gen Z holds 2.6x more in 401(k)s than in Roth IRAs; for Millennials, the ratio is 3x. The combination of pre- and post-tax contributions to retirement accounts suggests a willingness among younger generations to layer tax strategies for retirement planning.

Read more: Can I contribute to a 401(k) and an IRA?

Staying the course

Market volatility in early April — sparked by unexpected tariff announcements and renewed trade tensions — put investor discipline to the test. But younger savers held steady. Roth IRA balances for Gen Z and Millennials fell in April, with Gen Z down more than 7% and Millennials seeing a double-digit slide. But by July, both groups had recovered. Gen Z hit a new high, and Millennials nearly returned to their March peak.

The rebound suggests younger investors aren’t flinching in the face of volatility — many are continuing to contribute, signaling discipline and a long-term view in how they build wealth. The rebound aligns with recent Empower research, which found that nearly half of Americans (49%) are tuning out short-term noise and taking a long-view approach to investing.

Read more: Roth IRA investment returns: How to grow your wealth for retirement