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Gen Z will take financial advice from AI, do side hustles, hope to retire by 61


In two years, Gen Z, people born between 1997 and 2012, will make up more than a fourth of all workers. Members of the chronically online generation first entered the workforce during the pandemic, grappling with its upheaval and embracing remote and flexible jobs.

Despite the economy’s uncertain future, Gen Z expects to retire at age 61, younger than any other generation’s estimate, according to a survey by the Westlake-based financial services company Charles Schwab.

The survey looked at 1,000 workers with 401(k) plans and found that millennials expected to retire at 64 while boomers said they didn’t expect to stop working until age 68.

Despite these ambitious goals, Gen Zers felt most concerned about saving for retirement. Ninety-nine percent of Gen Zers surveyed, compared to 88% of millennials and 86% of boomers, said they were concerned about being able to save while covering monthly costs exacerbated by inflation and having reserves for emergencies.

Almost all Gen Zers were already seeking out financial advice. The most popular source was family and friends, followed by their 401(k) plans, employers, financial planners and even social media. Other generations sought out advice from similar sources, but instead of social media, millennials and Gen Xers consulted business and financial media.

Marci Stewart, director of communications consulting and participant education at Schwab Workplace Financial Services, said Gen Z workers have a healthy sense of financial self-awareness.

“Sixty-two percent of Gen Z thinks their financial situation warrants professional advice, which is more than any other generation,” Stewart wrote in an email, “It’s encouraging that Gen Z doesn’t disengage because of the ongoing inflation and market swings … that’s a very good sign for future success.”

Gen Zers were also the most receptive to the idea of using artificial intelligence-based digital tools for financial planning compared to workers from other generations. This can mean posing personal finance questions to ChatGPT or using personal finance applications like Mint, which show insights on where to save after analyzing your recurring expenses. There are also “robo advisers” like Betterment and Wealthfront that help users make automated investments.

Three-fourths of Gen Zers were open to using such tools compared to a quarter of boomers. Perceptions of AI financial planning tools may vary across generations, but adoption across the board is pretty low with only 9% of Gen Zers surveyed currently using the tools.

Though a majority of Gen Zers in this survey are concerned about saving efficiently for retirement, they also value work-life balance.

Almost 90% of Gen Zers were willing to forgo a raise in exchange for better benefits compared to half of boomers. Benefits can be traditional offerings like health insurance but can also extend to more unique perks like mental health days or reimbursements for wellness products. Seventy-six percent of Gen Zers would also forgo a raise for more flexible hours and hybrid work. Only 29% of boomers would do the same.

Younger employees appear to have a more flexible approach to work than older ones. A separate survey conducted by Collective, an online platform that offers accounting services for the self-employed, found that 20% of people under 35 had a side hustle that they would be able to turn into a career if they wanted, compared to 12% of people over 35. More than half of workers under 35 said they had a backup plan in case of layoffs compared to around a third of older workers.

Gen Z is also taking on less conventional jobs as social media and the Internet have made it easier to set up online businesses and connect with clients than ever before. The study found that 38% of people under 35 participated in freelance work and 26% more expected that they would at some point. Only 31% of workers over 35 expected to freelance.

While freelance work doesn’t come with benefits and retirement saving plans, it provides workers the most flexibility in terms of hours and the projects they take on.

The Gen Z participants Charles Schwab surveyed contributed more than 10% of their salaries to their 401(k) plans.

“A good rule of thumb is to save 10% to 15% of your income for retirement, including any match from your employer, so these workers are off to a great start,” Stewart said.

Leah Sirama
Leah Sirama
Leah Sirama, a lifelong enthusiast of Artificial Intelligence, has been exploring technology and the digital realm since childhood. Known for his creative thinking, he's dedicated to improving AI experiences for all, making him a respected figure in the field. His passion, curiosity, and creativity drive advancements in the AI world.
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