Gen Z Grapples with Debt, Some Spend Freely Despite Low Confidence in Retirement Readiness
Only one in five Gen Z investors say they understand how compounding interest works; four in ten believe the standard retirement age of 65 is not relevant to them
COLUMBUS, Ohio, May 27, 2025 /PRNewswire/ -- Despite just beginning their careers, many American Gen Z investors (aged 18-28) are already evaluating their retirement prospects – and many feel uneasy about their financial futures. A new Advisor Authority study, powered by the Nationwide Retirement Institute, highlights the financial challenges of Gen Z investors and the unexpected spending behaviors and digital strategies they're using to navigate them.
More than two-in-five (44%) Gen Z investors say they feel behind in their retirement savings goals and are working to catch up. However, Gen Zers are leaning into spending despite long-term financial concerns, with nearly a fifth (17%) saying they are spending more on leisure expenses at this point in their life because they may never be able to retire.
As traditional retirement feels increasingly out of reach, Gen Z is beginning to challenge the very concept of retiring at age 65. Thirty-eight percent believe the standard retirement age of 65 is not relevant to them in today's economic environment, and approximately half (48%) now plan to work longer, citing remote work as a factor that makes it unnecessary for them to retire at that age.
Gen Z's skepticism is rooted in current financial pressures. Four in ten (40%) feel worried about their ability to afford monthly bills over the next 12 months, and nearly half (46%) cited paying down loans and debts (i.e., student loans, credit cards, mortgages, car payments, etc.) as a top financial commitment in that same timeframe.
To further compound this generation's stress, 77% of Gen Zers are also concerned about a U.S. economic recession over the next 12 months. However, many aren't taking proactive steps to address that concern – four in ten (40%) currently do not have a strategy in place to help protect their assets against market risk, slightly up from 32% a year ago. Even more troubling, only a fifth (19%) of Gen Z investors say they understand how compounding interest works when investing over time, potentially limiting their ability to build long-term wealth.
"With recent market volatility, it's not surprising that Gen Z savers are somewhat pessimistic about their financial futures," said Kristi Martin Rodriguez, leader of the Nationwide Retirement Institute and financial services marketing for Nationwide. "For these young people, retirement may seem like a lifetime away and feel like a very steep mountain to climb. However, something they may not be considering is that they could potentially live decades longer in retirement than prior generations. As a mother of two Gen Z daughters, I've been stressing the importance of beginning to save right away so they can leverage their most powerful advantage: A long-term horizon that allows them to maximize the power of compounding interest."
A New Way of Saving and Investing
Gen Z is taking advantage of new, less traditional financial tools to save their hard-earned cash, no longer relying on legacy financial institutions to grow their money. As a generation raised on modern technology, nearly one in three (32%) Gen Z investors use digital wallets (e.g., Apple Pay or Google Pay) and 30% use peer payment platforms (e.g., Venmo or Zelle) to invest, save or store their money. Additionally, a surprising one in five (19%) say they invest, save or store their money in cryptocurrency or non-fungible tokens.
Gen Z Investors Delay Seeking Professional Guidance
Despite concerns about both the current economic environment and their personal financial standing, many Gen Zers are holding off on seeking professional guidance. A third (33%) of Gen Z investors who don't pay to work with a financial professional indicated it is because they believe they are too young/early in their retirement planning journey to rationalize pursuing financial advice. Instead, they are turning to more accessible – though not always reliable – sources. A quarter (24%) of Gen Z investors who don't have a financial advisor indicated it is because they get any necessary financial advice from online financial influencers ("finfluencers") and social media platforms.
While digital content can be a good starting place when it comes to financial literacy, the absence of professional advice may leave gaps in understanding or strategy. That said, personalization is still a key motivator for this group. More than a third (34%) say an advisor who understands their financial goals at this stage in their life would make them more likely to work with a financial professional.
"It's great to see Gen Zers seeking out financial literacy from a variety of resources. Knowledge is power, and the more you learn about investing and saving, the better prepared you will be," Rodriguez said. "However, make sure you're working with trustworthy sources, including the most reliable source of all: a trusted financial professional. For those who feel they don't have the means or assets to do so, many workplace retirement plans offer some great educational tools and resources as well as financial guidance that can be both affordable and impactful."
Financial Professionals Applaud Gen Z Financial Literacy
Advisors who work with Gen Z clients see a generation that is both cautious and capable. A majority of these advisors (62%) believe that Gen Zers are more financially literate than previous generations.
Advisors have noted they are spending a significant portion of their time educating Gen Z clients on foundational financial topics. Specifically, 42% of advisors are counseling their Gen Z clients most frequently on investing for the first time (e.g., 401(k)s, IRAs and stocks). Additional topics advisors feel are most important for their Gen Z clients include:
The importance of starting retirement planning early (54%)
Basic budgeting and building healthy spending habits (52%)
Understanding the basics of investing and compounding growth (49%)
Debt management and strategies for avoidance (49%)
These ongoing conversations suggest that, while Gen Z may feel overwhelmed, many are actively looking to build a solid financial foundation— and advisors see an opportunity to guide them toward long-term success.
"It's encouraging to see advisors focused on the right things with Gen Z clients. That includes helping them break the ice on saving and investing, while balancing that opportunity with other financial demands including debt and spending on today's needs," Rodriguez said. "However, to really connect with this generation of savers, advisors are going to need to lead with empathy. Make sure you are considering Gen Zers' unique financial situation and listening to understand. Help them recognize the longevity challenges they will likely face, provide them with education and knowledge to make smart financial decisions and arm them with a holistic financial plan that will help ensure they won't outlive their income in retirement."
The Nationwide Retirement Institute offers additional resources to help advisors facilitate conversations with clients.
For additional insights on this survey data, see our infographic.
Nationwide's tenth annual Advisor Authority study powered by the Nationwide Retirement Institute® explores critical issues confronting advisors, financial professionals and individual investors—and the innovative techniques that they need to succeed in today's complex market.
About Advisor Authority: MethodologyThe Harris Poll, on behalf of Nationwide, conducted an online survey in the U. S. among 610 advisors and financial professionals and 2,524 investors ages 18+ with investable assets (IA) of $10K+, January 6-25, 2025. Among the investors, there were 349 Gen Z investors (aged 18-28).
The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data for advisors is accurate to within ± 4.0 percentage points and for investors the sample data is accurate to within ± 2.5 percentage points using a 95% confidence level. This credible interval will be wider among subsets of the surveyed populations of interest.
For complete survey methodology, including weighting variables and subgroup sample sizes, please contact news@nationwide.com.
About The Harris PollThe Harris Poll is one of the longest running surveys in the U.S. tracking public opinion, motivations and social sentiment since 1963 that is now part of Harris Insights & Analytics, a global consulting and market research firm that delivers social intelligence for transformational times. We work with clients in three primary areas: building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. To learn more, please visit www.theharrispoll.com.
About NationwideNationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified financial services and insurance organizations in the United States. Nationwide is rated A+ by Standard & Poor's. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; excess & surplus, specialty and surety; and pet, motorcycle and boat insurance.
For more information about Nationwide and Nationwide's ratings, visit www.nationwide.com or Company Ratings -- Nationwide.
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Nationwide Investment Services Corporation (NISC), member FINRA, Columbus, OH. Nationwide Retirement Institute is a division of NISC.
Nationwide, Nationwide is on your side and the Nationwide N and Eagle are service marks of Nationwide Mutual Insurance Company. © 2025
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Contact:Alessandra MohrThe Bliss Group212-840-1661amohr@theblissgrp.com
Kristen Vasas-SamsonNationwide(614) 435-5716vasask@nationwide.com
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His innovation lab, along with the Food Safety Program at Purdue University, the Livestock Systems Program at University of Florida and Peanut Production, a program addressing malnutrition at the University of Georgia, are among the universities that will see cuts under the Trump administration's Department of Government Efficiency or DOGE. Hughes said his team members study threats to agriculture overseas, to 'quickly deploy' mechanisms against those threats when the time comes. One threat the team is studying is thrips, a small insect that poses a risk to the U.S. floral industry. His team uses a space in Nepal to reduce risk to local crops. Additionally, Hughes and his team at Penn State have been developing an artificial intelligence system called PlantVillage which provides advice to help farmers cope with climate change to increase the yield and profitability of their crops. He says many American and European scientists are 'decamping' to China because they fill a space of 'research excellence' left by cuts to research in the United States. 'You want to make sure if you do have an AI system giving knowledge to American farmers, you better be sure it's not a made-in-China system.' Hughes said. 'To be able to count on that institutional market that comes from food assistance is a significant benefit to the U.S. farmer,' said Thoric Cederstrom, International Food Aid representative on the U.S. Dry Bean Council. SUPPORT: YOU MAKE OUR WORK POSSIBLE Cederstrom said he doesn't think there is any organization that 'stands ready to fill that void,' left by USAID. He argues there is 'enlightened self-interest' in the purchase of American crops from farmers to be used as aid abroad. This purchase helps in 'stabilizing demand and prices for farmers across the heartland' and 'offset the risk of unpredictable market, trade disruptions and climate variability.' The USAID programs create a market that farms can respond to to turn a profit and 'generate income that keeps their businesses active.' 'There couldn't be a worse time to lower our guard,' said Kevin Shea, former administrator of the Animal and Plant Health Inspection Service at USDA. 'African swine fever in the Dominican Republic, very close to our shores, very easily just one trip away from getting here. That's just one example. Foot and mouth disease, eradicated a century ago in America, is now appearing all around the world for the first time in many, many years. Another big concern for us. And screwworm has breached the barrier in Panama for many years and has made it into Mexico.' Shea says that the inspection service has lost nearly 1,300 or around 15% of the workforce has left 'in the past few months' and with the additional cuts under the FY26 budget request 'APHIS can not do its job.' Both Hughes and Shea talked about citrus greening disease, which has impacted the citrus industry in Florida as an example of the need for research and inspection programs. Sarah Charles, former assistant to the administrator of USAID's Bureau for Humanitarian Assistance, said despite the cuts, the career staff left at USAID are working 'furiously' to move food kept in warehouses around that globe, 'even knowing they have been fired,' to areas in need. She also said the U.S. government response to crises, such as the 2025 Myanmar earthquake, has been 'limited' because the capacity has been 'taken offline by the Trump administration.' China showed up in a major capacity, but many of its outreach programs are through the government, so the networks built by the U.S. with non-governmental partners and civil society organizations have been 'abandoned,' Charles said. 'Food rations that could supply three and a half million people for a month are rotting in warehouses around the world because of USAID cuts,' Shaheen said. 'Sadly, people are going hungry while farmers are losing a critical buyer for their crops.' Tom Foley is an intern reporter for Iowa Capital Dispatch.
