The Retirement No-No Gen Zers Are Doing More Than Boomers and Other Generations

Core Insights - A significant portion of Gen Z workers (46%) have accessed their retirement accounts, which is notably higher than the 31% of millennials who have done so, indicating a concerning trend among younger workers [1][2] - The financial implications of withdrawing retirement funds early are severe, as it not only incurs tax penalties but also diminishes the potential for compound growth over time [2][5] Reasons for Withdrawal - The primary reason for accessing retirement funds among all workers is to cover emergency expenses (37%), followed by housing-related costs (19%) [3] - A notable 42% of Gen Z workers have withdrawn retirement savings specifically to pay off debts, a stark contrast to only 6% of millennials, highlighting the unique financial pressures faced by this generation [4] Financial Health of Gen Z - Approximately one-third of Gen Z individuals feel financially "underwater," indicating a significant level of financial distress within this demographic [5] - Financial advisors recommend strategies such as transferring credit card debt to 0% promotional rate cards to alleviate immediate financial burdens while still contributing to an emergency fund [6]