• Gen Z is the youngest generation in the workforce and many members want to retire early.
  • But higher expenses and student loan payments may derail early retirement goals.
  • Start saving as soon as possible, get rid of debt, and use side hustles and investing to make retirement a reality.
Gen Z is in the workforce … and they are already looking for the exits. According to a Harris Poll conducted on behalf of the Transamerica Center for Retirement Studies, 43% of Gen Zers plan to retire before age 65. Gen Zers who have already started saving fully expect to retire on the early side and are engaging professional investment advisors and other financial resources — including AI — to make it happen. But could they be jumping the gun? Maybe. Stacey Tisdale, a financial behavior expert with 20 years of experience, tells Personal Finance Insider: “Gen Z has to prepare for the financial headwinds that they will face as they move forward in life and their careers. Gen Z is starting out with less money, more expenses, and higher costs.” Here are a few issues Tisdale says Gen Zers could see impact their early timeline for retirement:

1. Gen Zers make less money and have higher expenses

“Gen Zers are new to the workforce, which means they are making less money, but still have the same bills as everyone else: rent, car notes, credit card payments — and all of those expenses are at their highest levels right now,” Tisdale says. “Even going to the grocery store is more expensive.” Having these higher expenses leaves less in the pot for saving towards retirement. “These higher expenses have to be accounted for when it comes to how much there will be to realistically save,” she continues. “Interest rates and the cost of expenses may dip slightly, but everything is more expensive right now, and that will likely be the case for the foreseeable future.”

2. Gen Zers have only just begun their student loan payments

“I cannot stress this enough: Heading into retirement still making student loan payments will not make for a stress-free, enjoyable retirement,” Tisdale says. “If you had to take out student loans to further your education, that’s fine, but your focus should be paying off that debt. If that means you have to work three to five more years to retire debt-free, that makes more sense than trying to retire early.”

3. Gen Zers might discount time out of the workforce

Most Gen Zers are not at an age yet where they might take time out of the workforce to have children or care for elderly family members. “Time out of the workforce can really slow down retirement savings and interrupt retirement plans,” Tisdale says. “This is why it is important to start saving as early as possible and be consistent. Try to plan ahead for time out of the workforce and save more if and when that time approaches.” Robinhood offers the only IRA with an uncapped match. Get an extra 1% on every dollar you deposit. Every year. Start saving for retirement with Robinhood today.

What might help Gen Z reach their goal

“It’s important for Gen Z, since they are just getting started, to learn business basics and educate themselves on entrepreneurship, side hustles, and investing,” Tisdale told Personal Finance Insider. “Retiring well and early is possible if they really plan it out and realize that side hustles, investing, and entrepreneurship will be necessities for them to reach their retirement goals — not hobbies.”
Jennifer Streaks
Senior Personal Finance Reporter and Spokesperson
Jennifer is a Senior Personal Finance Reporter and Spokesperson for the Personal Finance vertical at Business Insider. She started her career covering personal finance at Black Enterprise Magazine, went on to CNBC where she covered personal finance, women and money and tech and then Forbes, where she reported on personal finance, business, tech and money matters related to the economy, investing, credit and entrepreneurship. Jennifer is also the author of Thrive!…Affordably: Your Month to Month Guide to living your Best Life without breaking the bank. The book offers advice, tips and financial management lessons geared towards helping the reader highlight strengths, identify missteps and take control of their finances. In addition, she has extensive experience as an on-air financial commentator and has been a featured expert discussing credit and savings, investing and retirement, mortgages and all things money and personal finance. She has an ability to discuss and simplify complex financial issues and make them easier to understand. Follow her on Twitter @jstreaks.