Gen Z are dipping into their retirements just to get by, reveals new report
Gen Z has also been skipping meals and avoiding visits to doctors just to pay rent.
Gen Z may have been in the news for frivolous spending, but they are also now the generation that is dipping into their retirement accounts to make ends meet. While the young adults are rallying behind the latest trends, they are now seen to be facing an acute financial crisis largely due to mismanagement. According to a new report from Payroll Integrations 2025 Employee Financial Wellness, Gen Z has been struggling to survive and is now relying on their retirement accounts, per Bored Bat.
According to the survey, it has been found that 38% of employees across all generations have withdrawn money from their retirement accounts, with Gen Z leading the list. The survey noted that nearly half of the young adults have withdrawn money from their retirement funds, compared to 31% of Millennials and 41% of Boomers and Gen X combined. While the survey expected the withdrawal of the money to be used for splurging on the latest trends, surprisingly, it was to make ends meet. The survey found that approximately 37% of the money withdrawn was for urgent purposes, such as emergencies, while the biggest reason was to clear debts. According to the report, 42% of the young adults have been able to pay off their debts using their retirement funds, while only 6% of Millennials and 17% of Gen X, and 0% of boomers have been able to do so.
Another survey by Redfin found that Gen Z has also been skipping meals and avoiding visits to doctors just to pay rent. More than one in five young adults has reportedly skipped meals to pay their monthly rent, while 22% have sold their personal belongings and 19% have delayed medical appointments. While Gen Z has been saving more than their parents' generation, the young adults have been grappling with student loans and credit card bills. As per Empower, Gen Z pays an average of $526 every month toward student loans, and in addition, they also carry more than $94,000 of personal debt, which, as per Newsweek's report, surpasses other generations' debt, including millennials with $60,000 in debt and Gen X with $53,000 in debt.
Natalia Brown, chief compliance and consumer affairs officer with National Debt Relief, said, "Their (Gen Zers) debt feels heavier because it hits earlier, right as they're launching their careers." Unfortunately, despite inflation cooling from its 2022 peak, many young adults are struggling with lost purchasing power. While median income has risen 23% since 2020, most homebuyers need to earn 80% more than that time. To survive a tight budget, the young adults have been depending on credit cards to cover day-to-day expenses, while the average credit card balance is around $3,262.
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