Workers between 18 and 25 have already saved $33,000 in their retirement accounts, the report found.
CEO and President of Transamerica Center for Retirement Studies and Transamerica Institute Catherine Collinson told Yahoo Finance Live that their ability to save has been “extraordinary.”
“It's extraordinary that 67% are saving — of those who are offered a plan," she said. "And that's something that they're doing extraordinarily well. As you can see in the retirement accounts, they've built up those savings."
When informed of the report's findings, Michelle Williams was surprised.
“That can’t be right,” said the 25 year old Chicago native. “It’s hard for me to believe that people in my age group are saving that much. I see what my friends spend on and it’s definitely not retirement, Williams stated.”
They like to splurge on clothes, especially luxury brands, she said. They aren’t alone. Gen Y and Z accounted for all of the luxury market's growth in 2022, according to a Bain & Company report.
But for James, a 22 year old from Bartlett, that doesn’t mean the generation can’t be responsible with their wallets. He notes that many Gen Z that are in the workforce with good paying jobs are likely to save when they can.
“I think people save if they can,” he said. “But in reality, I don’t think a lot of young adults can save with what they're being paid.”
A fidelity investments study paints a bleaker picture. It found that two in every three young adults aged 18-44 said that “they should save more but are so stressed about their finances – they avoid thinking about them altogether.”
James used to feel that way until he secured a job after college.
“I’ve been blessed; now, I feel like I can finally start building for the future,” he said.
Collinson told Yahoo Finance that while Gen Z is starting their savings journey earlier than their older counterparts, the generation is falling behind on saving for unexpected events.
“Their emergency savings have only saved $2,000, which is telling us they may be doing a better job at retirement than building up the rainy-day funds or emergency savings that they may need to tap into if a financial emergency pops up,” Collinson told Yahoo Finance.
GoBanking Rates suggest three simple tips to prioritize saving: live and spend within your means, automate your savings and set realistic savings goals.