Studies Show 63% Of Gen Z Workers Are Already Using Up Their Retirement Savings

A new wave of research highlights how financially strained Gen Z workers already are when it comes to retirement savings. Reports show that nearly half of Gen Z employees have tapped into their retirement accounts early, often due to pressing financial needs. Many are facing rising living costs, student debt, and limited emergency savings, which has pushed them to dip into funds that were originally meant for their future.

One study by Transamerica found that about a quarter of Gen Z workers have already taken hardship withdrawals or early distributions from their 401(k)s or IRAs. Meanwhile, other surveys indicate that the number could be even higher, with some suggesting close to half have raided their accounts. These findings suggest a troubling trend: younger workers are treating retirement accounts like short-term savings tools, rather than long-term investments.

Financial experts warn that this could create serious long-term consequences. Pulling from retirement funds not only reduces future security but also often comes with tax penalties and lost investment growth. For Gen Z, who are just beginning their careers, the lost years of compounding could significantly reduce the wealth they’re able to build over time. The research underscores the growing challenge of balancing immediate financial survival with long-term planning in today’s economy.