A stunning 31 percent of Generation Z workers have saved nothing for retirement over the past two years or so, according to a recent Bankrate survey. The move could ultimately cost them hundreds of thousands in retirement savings and expose them to one of America’s top financial regrets – not saving for retirement early enough.

The figures for Gen Z are above the overall average for American workers, at 24 percent, and above those for millennials, about 23 percent of whom saved nothing in 2021 or 2022. The numbers include those working full-time or part-time or who reported being temporarily unemployed.

The survey also revealed that 55 percent of American workers or those temporarily unemployed said they feel behind on their retirement savings, and the proportion only rises as they age:

  • Gen Z (ages 18-25): 30 percent feel behind
  • Millennials (ages 26-41): 46 percent feel behind
  • Gen X (ages 42-57): 65 percent feel behind
  • Baby boomers: (ages 58-76): 71 percent feel behind

It wasn’t all bad news for Gen Z workers, though. A solid 30 percent are contributing more to their retirement accounts this year than last year, compared to only 10 percent that decreased their contributions. At 3:1, it was the best ratio by far of any age group in the Bankrate survey.

A top financial regret for Americans is not saving enough for retirement, with 19 percent of Americans citing it, according to a 2021 Bankrate survey. Incredibly, a whopping 33 percent of baby boomers say it’s their top regret, as many enter their retirement without enough money saved.

To avoid running into this situation themselves, younger workers need to use their most important advantage – time – while it can still perform miracles on their investments.

How much is Gen Z losing just by waiting to invest?

While it’s easy to put off saving for retirement when it’s decades away, this strategy also means that young Americans are forgoing their most important ally in amassing a nest egg for their golden years: time. That’s because time can quickly make up for a much lower savings rate.

The graphic below shows how costly it could be to delay saving for the long term by even a decade. It assumes that workers invest $5,000 a year – or just less than $100 a week – in a retirement account such as a 401(k) or an IRA earning 8 percent annually – below the average historical return of the Standard & Poor’s 500 Index, a collection of America’s top companies.

Those retirement plans allow you to defer taxes on capital gains and dividends or avoid them entirely if you’re using the Roth versions of the plans. These tax advantages let you compound your money even faster and eliminate the drag of paying the taxman early on (or ever).

For a worker who starts investing at age 22 and reliably invests $5,000 and earns an 8 percent return over a 40-year period, those contributions would turn into about $1.295 million at age 62. For the worker who waits just 10 years, until age 32, that same contribution leads to $566,000 or so – a difference of more than $728,000! That’s the cost of waiting only a decade.

It may seem that waiting a decade costs an investor only the first 10 years’ worth of gains, or $72,433 here. But the real cost comes from being unable to compound for the extra 10 years at the end of your career, where the account balance jumps from $566,000 to nearly $1.3 million.

But say you couldn’t start saving and investing at age 22 and are unable to get started until age 32. How much more would you need to save to make up for that lost time? Assuming earnings of 8 percent, a worker would need to invest $11,434 a year for 30 years to catch up to the one who saved $5,000 annually starting at age 22 – 129 percent more to reach the same place.

Of course, the numbers become even more stark the longer you wait.

That’s the value of having time on your side, and why it’s so vital for everyone who wants a stronger financial future to start investing today, even if it’s only a little money. It’s worth reiterating that the gains above assume investing just $100 a week; then time works the magic.

Why are so many Gen Zers not investing?

In the Bankrate survey, Gen Z provided a number of clues why they’re not investing, and it’s certainly not easy in an environment where inflation is eroding purchasing power so quickly. Of those who invested as much in 2022 as in 2021 or less, Gen Z investors said the following factors were holding them back (respondents could pick more than one answer):

  • Inflation or higher cost of living: 43 percent
  • New expenses: 36 percent
  • Intent to keep more cash on hand: 35 percent
  • Stagnant or reduced income: 24 percent
  • Market volatility: 23 percent

With inflation touching multi-decade highs, it’s not shocking that Gen Z highlighted this factor most frequently. But surprisingly, this generation cited it the least of all age groups, and less than the overall average of 54 percent, so young Americans may be feeling its impact on investing less.

But Gen Z may be adding to its load of new expenses, rather than holding the line where it can. At 36 percent, this group named new expenses as the highest rate of any group (compared to millennials at 31 percent, Gen X at 15 percent and baby boomers at 21 percent).

Yet at the same time, these members of Gen Z cited their desire to keep more cash on hand at the highest rate of any age group, at 35 percent (compared to millennials at 24 percent, Gen X at 19 percent and baby boomers at 17 percent). Given the uncertainties around the economy, it could make sense to have emergency cash on hand to help keep you afloat.

Extra cash on hand seems to make good sense when 24 percent of surveyed Gen Zers cited stagnant or reduced income as a reason they’re not investing more in 2022 than in 2021. That number is in line with Americans as a whole, who reported the same reason 24 percent of the time.

Finally, 23 percent of Gen Z respondents reported market volatility as a reason they haven’t invested more in 2022, the highest of all age groups surveyed (millennials, 17 percent; Gen X, 16 percent; baby boomers, 19 percent). However, investors who are just getting started should understand that the market can be volatile at any time, and that time is an investor’s best friend. Investors who wait until the market seems safe will end up paying a higher price for their investments, and may still end up being wrong about their timing.

What Gen Zers who aren’t yet saving for retirement can do

Since time is your biggest ally, take full advantage of it.

Begin now

It pays to start investing today, even with a little money, and then make it an ironclad discipline. If young Americans want to avoid the fate of most baby boomers, who feel they’re way behind on retirement savings, this discipline has to become an unshakable priority.

Follow a proven wealth-building strategy

For investors getting started, the game plan to build wealth is straightforward: buy a diversified portfolio of investments (perhaps through a few funds), add to those funds regularly over time and hold on to the investments through good times and bad. Investors who have done that with an S&P 500 index fund have enjoyed 10 percent annual returns over long periods.

Don’t beat yourself up

It can be easy to feel bad about not saving enough. You might beat yourself up about it, causing your resolve to weaken. Instead, stay focused on your goal, don’t judge yourself and just get back to moving in the right direction toward greater financial security. You’re not going to lose the race if you can’t contribute money this month or even this year — it’s the long-term focus that matters.


All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,312 adults, of whom 167 qualified as Gen Z workers. Fieldwork was undertaken between Sept. 21-23, 2022, and the survey was carried out online. The figures have been weighted and are representative of all U.S. adults (aged 18+).