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- Gen Z is the youngest generation in the workforce, and many members want to retire early.
- But increased expenses and student loan payments can derail early retirement goals.
- Start saving as soon as possible, eliminate debt, and use side hustles and investments to make retirement a reality.
Gen Z is in the workforce and they are already looking for a way out.according to Harris Paul According to a study commissioned by Transamerica Retirement Research Center, 43% of Gen Zers plan to retire by age 65.
Gen Z, who have already started saving in earnest, are looking to retire early and are leveraging professional investment advisors and other financial sources, including AI, to make that happen. But are they likely to jump the gun? perhaps.
stacey tisdale“Gen Z must prepare for the financial headwinds they will face as they move forward in their lives and careers,” the behavioral financial expert with 20 years of experience told Personal Finance Insider. Gen Z is starting with less money, more money, and increased spending and costs. ”
Here are some issues Tisdale says could impact Gen Z’s early retirement schedule:
1. Gen Z earns less and spends more.
“Gen Z is the new workforce, which means they earn less but have the same bills as everyone else: rent, car payments, credit card payments, and all of those expenses are now at their highest levels. Yes,” Tisdale said. “It’s expensive just to go to the supermarket.”
The higher your expenses, the less money you can save. retirement. “These high expenses need to be factored in when you think about how much you can realistically save,” she continues. “Interest rates and fees may come down a bit, but everything is more expensive now and likely to be for the foreseeable future.”
2. Gen Z is just starting to pay off their student loans
“I can’t stress enough that if you continue to pay off student loans, you’re not going to have a stress-free and enjoyable retirement,” Tisdale says. “If you have to take out student loans to get into college, that’s fine, but you should focus on paying them off.” debt. If that means you have to work three to five more years to retire debt-free, it makes more sense than aiming for early retirement. ”
3. Gen Z may discount time away from the workforce
Most Gen Zers are not yet old enough to take time off from work to have children or care for elderly family members. “Taking time away from work can really reduce your retirement savings and disrupt your retirement plans,” Tisdale says. “That’s why, Start saving as soon as possible And be consistent. Plan ahead when you’ll quit your job and save more as that time approaches. ”
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What helps Gen Z achieve their goals
“For Gen Z, it’s important to learn the basics of business and learn about entrepreneurship, side hustles, and investing because they’re just starting out,” Tisdale told Personal Finance Insider. “It’s possible to successfully retire early if you plan seriously and recognize that you need a side hustle, investments, and entrepreneurship, not just a hobby, to achieve your retirement goals.”
