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Gen Z is prioritizing travel spending over all else, a new study has found, prompting worry about the long-term financial stability of the nation’s youngest adults.
Some 48 percent of those under 29 prioritize vacations over saving for retirement, according to a new report from J.P. Morgan.
Gen Z’s penchant for trips is the highest of four generations involved in the study. Just 11 percent of baby boomers - ages 62 to 80 - prioritize saving for vacation, the study found.
“While retirement savings remains a top goal for all participants, younger participants are more likely to prioritize other financial needs,” J.P. Morgan noted.
But there’s a sentiment across all generations that employers need to play a more active role in helping employees make retirement decisions, the study found.
Gen Z is almost 60 percent more likely than boomers to expect retirement advice about how much to contribute to their retirement plans.
Overall, Americans are on track to retire with far less money than they think they should have, a host of separate surveys in the past year
The average worker believes they will need $1.2 million in savings to retire comfortably but around half think they’ll have less than $500,000, according to a survey by wealth management firm Schroders.
The Social Security system’s ability to bridge that gap for retirees will take a serious hit in 2032, when the depletion of a key funding source will cause payments to drop by as much as 22 percent.
Experts believe the best way to counter fears over retirement finances is to start early and contribute often. A 20-year old could be a millionaire at retirement if they contribute $160 a month to their retirement.
Someone starting their contributions at 45 would have to save $1,395 a month to be a millionaire if they retire at 67.
The early-and-often approach to retirement savings is “the most critical piece of building wealth and preparing for retirement,” financial planner Jordan Vlastuin told The Independent in February.
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