What are Gen Zers’ attitudes toward money?
Survey: Gen Z's views and approach to investments
Survey: Gen Z's views and approach to investments
- Gen Zers invest an average of 9% of their income per year (roughly $5,522).
- 1-in-5 of Gen Zers live with their parents to save money.
- Although Gen Zers are 12% less likely than older generations to invest in a 401(k), they are 11% more likely to invest in a Roth IRA.
Gen Zers are 62% more likely than older generations to have no expectations of returns on their investments.
Gen Z adults (born between 1997-2005) have grown up in a very different financial landscape than their predecessors. The past few decades have seen the rise of everything from social media and cryptocurrency to brokerage-trading apps and meme stocks. Members of Gen Z stand out for being the first generation without a living memory of life before the Internet. How has having instant access to investing affected Gen Z’s approach to money?
*Empower surveyed 1,000 Americans employed
Read on to discover how Gen Z’s investment strategies and perspectives stack up against those of older generations.
Is Gen Z Money Conscious?
Although the eldest members of Gen Z are just now in their mid-20s, recent studies1 indicate that many are already planning for retirement. The survey
Gen Z's Allocations and Expectations
Overall, the Gen Zers surveyed who invest consistently have invested 10% of their income each year, which works out to an estimated average of
While Gen Z was 12% less likely to invest in a 401(k) than older generations, it’s possible that many simply haven’t had the option yet. Between the rise of the gig economy and many Gen Zers still working their way up from entry-level positions, some younger generations are using alternate investment vehicles. One example is a Roth IRA, which Gen Zers are 11% more likely to invest in than older generations.
Keeping an Eye on Finances
In the age of commission-free brokerage apps, Gen Z has grown up with the ability to watch the stock market right from their smartphones. Next, we looked into the tools they use to make and track their investments compared to older generations.
While we found manual investing to be the most popular approach for Gen Z, those with a bachelor’s degree or higher were 39% more likely to automate their investments. Gen Z has also taken advantage of the latest innovations when managing their finances; they were 26% more likely than older generations to track their finances through mobile apps. Having their investments in the palm of their hand seems to make it easier for Gen Z to track their portfolio’s performance – 1-in-4 members of Gen Z check in on their investments daily, weekly, or monthly.
Gen Z investors have largely learned the ropes from family members and friends. But they are also nearly seven times more likely than other generations to use TikTok for financial advice. Successfully navigating social media investment forums comes down to being able to separate bad advice from useful information.
While some Gen Z investors reported using advanced AI platforms for advice, they aren’t likely getting very specific answers. Currently, those platforms are only programmed to give very general advice like “consider a Roth IRA” rather than offer up specific stock picks.
A New Generation of Investors
Advances in financial technology and access to advice through social media platforms appear to have encouraged members of Gen Z to invest earlier than previous generations. This could set them up for a strong financial future as when it comes to financial planning, one of the most beneficial assets is time.
For this study, Empower contracted 1,021 full-time employees about their approach to finances and investments from February 10 to February 13, 2023. Generationally, 43% of respondents were Gen Z, 30% were millennials, and 27% were Gen X.
Fair Use Statement
Feel free to share these resources for any non-commercial purposes! All we ask in return is that you link back here to our findings if you do.
1Business Insider, “Here's the typical age people in each generation started saving for retirement,” April 17, 2021.
The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. No part of this blog, nor the links contained therein is a solicitation or offer to sell securities. Compensation for freelance contributions not to exceed $1,250. Third-party data is obtained from sources believed to be reliable; however, Empower cannot guarantee the accuracy, timeliness, completeness or fitness of this data for any particular purpose. Third-party links are provided solely as a convenience and do not imply an affiliation, endorsement or approval by Empower of the contents on such third-party websites.
Certain sections of this blog may contain forward-looking statements that are based on our reasonable expectations, estimates, projections and assumptions. Past performance is not a guarantee of future return, nor is it indicative of future performance. Investing involves risk. The value of your investment will fluctuate and you may lose money.
Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements.
Advisory services are provided for a fee by Empower Advisory Group, LLC (“EAG”). EAG is a registered investment adviser with the Securities and Exchange Commission (“SEC”) and subsidiary of Empower Annuity Insurance Company of America. Registration does not imply a certain level of skill or training.
© 2023 Empower Annuity Insurance Company of America. All rights reserved. “EMPOWER” and all associated logos, and product names are trademarks of Empower Annuity Insurance Company of America.