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45% of Gen Z and millennials don’t see the point of saving for the future

March 29, 2022, 4:22 PM UTC

Even before the coronavirus pandemic, a growing cohort of younger people said they were pessimistic about their financial futures. In the U.S., growing wealth inequality, ballooning student loan balances, unaffordable housing, and stagnant wages loomed large over millennials and the oldest members of Gen Z.

And things don’t seem to be getting any better; in fact, housing costs have sky-rocketed further and record-level inflation is eating away at purchasing power. Events of the past two years — the pandemic, civil and political unrest, worsening climate change, and now the war in Ukraine — have deepened the sense of dread for many.

So maybe you can forgive the 45% of workers aged 18 to 35 who don’t see the point of saving for retirement “until things return to normal,” according to Fidelity Investment’s 2022 State of Retirement Planning study. Why save for a retirement that might not even come?

Fidelity doesn’t define what “normal” means, but those young people could be missing out on prime years for their savings to compound, says Rita Assaf, vice president of retirement at Fidelity Investments. Though it might sound trite, there’s never a “good” time to save, she says. Because there’s no one definition of “normal,” young people should start saving now, she argues. There will always be reasons to put it off.

“To this group, retirement seems like it’s a very long way away, and they have more immediate concerns,” says Assaf. “It’s important to look at the big picture, and realize one of the most important things you can do [for financial health] is start saving for retirement.”

That’s what Nicole, who asked that her last name be withheld to protect her privacy, tells herself when she starts to fall into “catastrophic” thinking about the future. It can be easy to be pessimistic and despair about the state of the world, admits the 38-year-old mother of two — especially when she thinks about the future her children will inherit.

But no matter what happens in the next 40 or even 50 years, the Texas resident predicts there will never be when she’ll wish she saved less money, rather than more. That inspires her to prioritize it.

“I wonder, will we get to retirement when half the world has melted and half of our savings are worthless, and we’re fighting it out in the Thunderdome?” she jokes. “But you can’t plan based on outliers.”

It’s kind of silly to think we’re uniquely screwed.”

Nicole, 38-year-old mother of two

When she feels particularly freaked out about the future, she reminds herself that “there’s always been bad stuff going on.” Her parents, for example, lived through a presidential assassination, a cold war, and a military draft. Though it might be “cheesy” to frame the conversation that way, she says considering those historical events gives her perspective.

“It’s kind of silly to think we’re uniquely screwed,” she says. “Things are never static. Probably in 10 to 20 years, there will be more scary stuff.”

Alicia, a 32-year-old working in tech who asked that her last name be withheld to protect her privacy, maintains a similar perspective. Though she’s especially worried about climate change, she focuses on what she can control: her spending and savings. That way, she’ll always have options. 

Saving for her feels like “empowerment.”

“It can be hard to believe, but putting something away, it will help you,” she says. “Keep some in your nihilism fund.”

Fidelity’s study, which surveyed 2,622 Americans of all ages with at least one investment account, wasn’t all bad news. Overall, 79% of Americans are optimistic about retiring on their own terms. Baby boomers are the most confident they’ll achieve their financial goals, followed by Gen Xers, and then millennials and Gen Z.

To be part of that group, Alicia reminds herself that when bad things happen — a drop in the market, a recession — most financial professionals advise not to take drastic action; to stay the course and keep on with your financial plan. When uncertainty starts to gnaw away at her, she defaults to following that advice. 

“It’s really hard to look at the newspaper and not feel pessimistic sometimes,” she says. “For me, though, it’s important to keep in mind that every generation has had concerns and threats to their sense of security. But the world keeps spinning.”

This story has been updated to remove Nicole’s last name.

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