Gen Z workers are more worried than any other generation that artificial intelligence could undermine their ability to save for retirement, a TIAA survey has found.
Some 51% said AI threatens their capacity to build retirement savings – 11 percentage points above the national average. Concerns are closely tied to the prospect of disrupted careers and reduced earning power.
Forty-two per cent of Gen Z respondents said they were extremely or very concerned that AI could affect their career or earnings before they retire. That compares with 33% of millennials and 28% of Generation X and baby boomers.
The findings come as business leaders warn of major changes linked to the technology, including potential job losses. TIAA chief executive Thasunda Brown Duckett has warned that young workers who do not adapt could be placed at a disadvantage.
“Artificial intelligence is reshaping industries at a pace that is breathtaking,” Ms Duckett told graduates of Florida A&M University earlier this year. “The worldwide economic landscape is shifting right in front of us.”
She added: “Industries, vocations, and jobs that once seemed reliable may not be the havens they once were.”
Gen Z retirement worries extend to longer lives
The survey, focused on retirement in the age of AI and GLP-1s, also found that Gen Z is concerned about the financial consequences of people living longer.
Scientific advances could help researchers develop treatments for cancer and other serious diseases, potentially allowing people to live longer and healthier lives. But a longer retirement would also require savings to last for more years.
Fifty-nine per cent of Gen Z respondents feared they would withdraw too much from their retirement savings and run out of money before they died. The figure was 47% among millennials and 54% among Generation X and baby boomers.
Almost half of Gen Z respondents, 47%, said traditional retirement planning did not adequately take longer lifespans into account.
Starting to save early can give money more time to grow through compounding, potentially reducing the amount that needs to be set aside each year. Working for a few additional years could also allow savings to grow for longer while reducing the period they need to fund.
Thasunda Brown Duckett urges saving from the first pay cheque
Ms Duckett said Gen Z’s concerns could encourage young workers to take their financial future seriously sooner, while stressing that retirement saving should not come at the expense of immediate financial security.
“Especially for young people, retirement seems so far away, but there’s a hack,” she said. “The hack is: first job, first dollar.”
She advised workers to maximise their retirement contributions before receiving their pay, saying: “The first thing I tell young people is, your very first job, max out before you get the check, because once you get it, you will find ways to spend it.”
Ms Duckett also urged young workers to take full advantage of employer matching contributions and the benefits of compounding. She said she followed that approach after starting her first job at Fannie Mae in the 1990s, immediately maximising her 401(k) contributions.
“Max out on your retirement, have your rainy day fund to make sure that you can afford the flat tire and all the basic things that life will give you,” she said. “Then you can start investing.”
