:max_bytes(150000):strip_icc()/GettyImages-2176645598-fe4f58872a4643539e4b0daaea3c0c48.jpg "How Does Gen Z’s 401(k) Balance Stack Up Compared to Other Generations")
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Key Takeaways
- Gen Z workers have an average 401(k) balance of $13,500, with a 7.2% employee contribution rate that climbs to 10.9% when employer matches are included.
- Gen Z started working with financial advisors at an average age of 23, earlier than any previous generation.
- Despite having the smallest balances, 63% of Gen Z workers say they’re confident they’ll be financially prepared for retirement—higher than any other generation.
It’s perhaps a timeless pattern that older generations depict the young as reckless with money, less eager to work, and maybe even a worrisome sign of the future. Any such stereotypes need a major update with Gen Z (ages 13 to 28 in 2025), who are saving for retirement earlier than previous generations and seeking advice from financial planners far sooner.
According to Northwestern Mutual, Gen Zers who have financial advisors start working with them at an average age of 23, more than two decades earlier than baby boomers.
So though Gen Z’s average 401(k) balance is the lowest of any generation, that’s more a function of age than generational apathy. Many Gen Zers who are saving for retirement are just a few years into full-time work.
Starting Small But Starting Early
Gen Z’s $13,500 401(k) average covers a wide spectrum, from college students to those already ascending the corporate ladder. Vanguard’s data shows workers under 25 averaging just $6,899 in their 401(k) accounts, with a median of $1,948. Data from the Transamerica Center for Retirement Studies shows that those in Gen Z who already have a middle-class income have a median retirement savings of $43,000.
If your balance is close to these figures, don’t be alarmed: that’s expected since you’re likely still in school, working part-time, or in the first years of your first full-time job. You can still start building a foundation of retirement savings earlier than previous generations.
Why Saving Earlier Matters
Time rewards those who start early. A 20-year-old investing $300 per month at a 7% return would accumulate $1.03 million by age 65. Wait until 30, and the required monthly contribution jumps to about $620. Start at 40, and it’s about $1,360. The longer you wait, the steeper the climb.
Many in Gen Z, despite the turbulent economy of recent years, are saving accordingly.
Important
The typical Gen Zer who works with a financial planner started doing so at an average age of 23, according to Northwestern Mutual.
If you’re in Gen Z and you don’t even have a 401(k) yet, that’s okay. If your employer doesn’t offer one, you can open an IRA and automate a monthly contribution, even if you can only afford just a modest amount each month. The habit matters more than the monthly figure right now.
If you have access to a workplace plan, try to get the maximum from your employer match before anything else—that’s free money you’d be leaving on the table. If you’re carrying high-interest debt, it’s reasonable to work on paying that down while contributing at least enough to capture free money from your employer. The goal isn’t perfection—it’s building early momentum as you start a lifetime of retirement savings.
