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3 things a financial planner wishes she could tell Gen Z about saving for retirement

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It’s never too early to start saving for retirement, so Gen Z should be thinking about it. 

While this generation isn’t behind when it comes to retirement savings, it’s a good idea to build good habits now and start saving while you’re young to make the most of your savings. 

Financial planner Mamie Wheaton of LearnLux told Insider there are several things she would tell Gen Z about retirement if she could.

1. Having an emergency fund could save your retirement savings

If you don’t have an emergency fund yet, it’s worth building one, Wheaton said. 

“I would say one of the No. 1 things that I wish that I could tell them is to have an emergency fund of three to six months of expenses set aside,” she said. 

An emergency fund is money put aside and only touched when absolutely needed. Putting this money away now won’t just help you in an emergency — it could also benefit you later on. When emergencies hit, many people turn to their retirement savings for help, and that could permanently limit the amount you have saved for retirement. 

Wheaton suggests a high-yield savings account for emergency funds, where the money can grow but still be easily accessed if needed. 

2. Save in a variety of ways

While your office’s 401(k) program is a good place to start saving, Wheaton encourages Gen Z to think about other ways to save, too. “Continue to save so that you can develop multiple streams of income,” she said. 

With different types of accounts, you’ll have the ability to use your money whenever you need it, like if you decide to retire early, and also lower your tax bill in retirement. “Invest in your 401(k), but also look into investing in an IRA and having some non-retirement investments,” Wheaton said. There are also several ways to save if you don’t have access to a 401(k).

When it comes time to use your money, it could be to your advantage to have several different accounts. It increases the limit on the amount you’re able to save each year, and can bring you more flexibility and options when you need them later on.

IRAs and brokerage accounts are easy to open and can be opened at a number of institutions, some of which you may already have a relationship with.

3. Gen Z is off to a great start — so keep it up 

Largely, Wheaton says she’s impressed with Gen Z’s retirement savings trends so far. “I actually think that Gen Z is ahead of the game when it comes to starting to save for retirement,” she said.

About 70% of Gen Z has a retirement account already, according to data from Transamerica. While the typical millennial started saving at age 25, the typical Gen Zer started at age 19. And, with compound interest helping money to grow over time, Gen Z could be far better off after starting younger.

“I think that a lot of them have started saving earlier because they are a tech-driven generation and they have so much access to the information and the importance of saving for retirement,” she said. 

Keeping up the trend of saving could put this generation in a great position for retirement later on.