Apr 6, 2022
In today’s episode of the “Inside the Plan with the
401(k) Brothers”, host Bill Bush and Andy Bush, advisors at
Horizon Financial Group, initiate the ‘Generation’s Series’ where
they would go generation-by-generation and talk about some of the
saving habits and what's on the minds of individuals. The majority
of this generation holds a certain characteristic trend as they're
at different stages in their lives. So, in this first episode of
the ‘Generation’s Series’, they're going to talk about Generation Z
and their behavior when it comes to retirement and saving as per
surveys and other resources.
- 01:50 - Millennials are raising young kids right now, whereas
Gen Xers are having children leave the house. Baby Boomers are
probably grandparents now.
- 03:45 – Bill says, folks born between 1997 and 2012 belong to
Gen Z. That generation size is about 67 million.
- 05:43 - The point is that even though for a 23, 24, or
25-year-old, it is nearly impossible for them to even imagine being
65, says Andy.
- 06:15 – Bill mentions that those pennies you're putting away in
your early 20s become the dollars - tens of dollars, or hundreds of
dollars over time.
- 09:30 – Andy states, as per the survey, 73% of Generation Z
respondents are contributing at least 3% of their salary to the
- 11:10 – According to the CGK Survey, 28% of Gen Z respondents
said that they plan to work in some capacity after retirement, and
52% said they will use personal savings to finance retirement,
points out Andy.
- 13:16 – Andy highlights, you cannot control the stock market or
the industry trends, but you can control your spending, and savings
habits, and those are the things that are within your
- 15:23 – 38% reported tapping into the retirement fund for an
unexpected medical cost while 23% said they did so to fund a travel
or leisure activity, mentions Bill.
- 17:05 – 75% of Gen Z currently maximize their company's match,
and 50% have up to their monthly contribution over the past
- 18:00 - Andy says that Gen Z is projected to hit $33 trillion
in income by the year 2030. That'll be more than a quarter of the
global income, so that's a big generation.
Three Key Points
- It's hard to grasp when you're that young and making dollars
for the first time, but it's the future goals, especially
retirement goals are going to be funded by funds that you chose not
to spend today. Essentially what saving for retirement is that I
want to be funding something in retirement by not spending that
dollar now? As a 20 something-year-old, that's hard to do, because
they're coming into their own money for the first time.
- You need to be able to save around 15% for your working career
for you at the age of 65 to have the best option to retire or not.
If you don't do that, then you get to 65 and you look up and say,
how am I going to pay my bills?
- You need to be careful about trying to identify your life with
external stuff and travel. Now, you want to experience great things
in life, but don't feel like you're missing out if you don't do
that before you're 28 or 30.
- “Who's your best friend when it comes to investing? It’s time.
Time is your best friend. So, the more the longer time you have,
the better off you are.” - Andy Bush
- They had a study and 71% of the Gen Z’s and that surveyor said
that they don't feel too young to begin saving for retirement,
which is the encouraging part.” – Andy Bush
- “88% are actively saving every month, including into their
retirement plan.” – Andy Bush
- “77% of the Gen- Z said thinking about finances causes them to
stress.” – Andy Bush
- “75% of the participants in that study of Gen Zers reported
credit card debt. Almost one in three said they owe more than
$5,000.” – Bill Bush
- “Debt is kind of a little bit of cancer to folks that are
trying to save.” – Andy Bush
- “The dollars from your younger life have more time to compound
from growth over time, and if you strip those away, you can't
replace them through the benefit of time.” – Andy Bush
- “Gen Z has a strong appetite for financial education and is
opening a savings account at younger ages than did prior generation
that comes from Kasasa.” – Bill Bush