Gen Z is entering the workforce in droves, and they’re already thinking about retirement. With decades ahead of them, this generation has time on their side — but knowing where to put their money can be overwhelming.
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GOBankingRates spoke with two investment experts to get their top picks for helping Gen Z set up a comfortable retirement.
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Thomas J. Brock, CFA, CPA, expert at Annuity.org, emphasized the importance of taking advantage of Gen Z’s long time horizon.
“The Gen Z cohort has a very long investing time horizon. These individuals need to be cognizant of this and embrace investment strategies that reflect a high tolerance for risk,” he explained. He recommended “investing heavily in global equities via highly diversified and low-cost investment vehicles, such as index funds and exchange-traded funds (ETFs).”
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Author and investor Dutch Mendenhall is particularly enthusiastic about Roth IRAs.
“This is an absolute no-brainer with tax-free growth,” he said. “You pay your taxes now, when you’re still young and making less cash, then withdraw when you’re retired without Uncle Sam clipping tickets. That’s the MVP of retirement accounts.”
Both experts stressed the importance of employer-sponsored retirement accounts.
As Mendenhall put it, “If you are not taking the company match, you leave money on the table. That is free cash, plain and simple. Contribute enough to get that full match and max this thing out.”
“Real estate is your long-game strategy,” Mendenhall said. “It might not be the flashiest asset in the short term, but it’s a beast regarding long-term wealth. Buy a property, rent it out, let someone else cover your mortgage and watch your equity build.”
Brock agreed, suggesting Real Estate Investment Trusts (REITs) as an accessible way to invest in real estate.
Cryptocurrency is definitely tempting for Gen Z investors, but Mendenhall thinks it calls for some skepticism.
“Okay, I know you’re hyped on crypto,” he said. “And hey, it’s cool. It’s like playing offense. It can give you huge gains in record time. But here’s the thing: Don’t go all-in on crypto. Make it your wild card: max 5%-10% of your portfolio.”
