Brynnley Beckman is only 23, but she is already thinking about retirement.

She teaches ninth-grade biology at the Shelton School in Dallas and contributes 3% of her salary to an employer-sponsored retirement fund. She hopes to increase her contribution by 1% each year.

“I wanted to start saving early because the more the money sits, the more it compounds, the more it’s going to grow,” Beckman said.

Like many of her peers in Generation Z, defined roughly as people born from 1996 to 2012, she is motivated to save. According to a 2024 report from TIAA, which provides retirement planning services for employees in the education, health care and nonprofit sector, 20% of Gen Zers are saving for retirement. They’re also contributing to 401(k) plans at higher rates than millennials did when they first entered the workforce, according to a 2023 Vanguard study.

“Gen Z in general, and in particular women, are starting to get an understanding that the more that you save and invest, the more agency and freedom you have over your life,” said Ryan Viktorin, a certified financial planner and financial consultant at Fidelity Investments.

Financial independence later in life is Beckman’s main motivation for putting money into a 403(b) plan, which is similar to a 401(k) but typically offered by public schools, nonprofits and religious institutions. “I could retire at the age that I want to, rather than working later, and have financial freedom and security,” she said.

Why is Gen Z better at saving money?

Financial experts credit Gen Z’s ability to save more at a younger age to a policy changes and technological advancements.

A provision in the Secure 2.0 Act, which took effect in late 2022, mandates that eligible employees be automatically enrolled in new 401(k) and 403(b) plans, with the ability to opt out. “Default enrollment and contributions really skirt around that human behavior component and just gets people started early,” said Melody Evans, a wealth management adviser at TIAA.

The Secure 2.0 Act also requires plans to offer contribution escalation — the option to increase contributions by at least 1% annually until at least 10% of an employee’s salary is being saved. For workers like Beckman, who are still at least 30 years from retirement, these features can reduce the likelihood by 60% that they will run out of money during retirement, according to a recent study by the Employee Benefit Research Institute.

Budgeting apps, personal finance podcasts and webinars have also helped Gen Z better understand the basics of saving and investing. Since 2020, 18- to 35-year-olds have made up 64% of new users of the micro-investing app Acorns, a company spokesperson said. For Robinhood, a stock trading app, 75% of customers are Gen Z or millennials (typically those born from 1981 to 1996), said Ally Liss, a product communications manager.

Some of the financial literacy and investing podcasts specifically aimed at Gen Z are “Money Moves,” “How to Money,” “The Money With Katie Show” and “More Money.” Gen Z is also more likely to discuss finances and investment strategies with their peers, Viktorin said.

Christopher Lind, 25, an information technology business analyst in Palm Beach County, Fla., says he often turns to Gemini, Google’s artificial intelligence chatbot, for a better understanding of retirement and taxes. “I ask AI a lot of questions regarding this stuff because I think it’d be impossible to know all of it unless you do this for a living,” he said.

No matter the tool, the focus on financial literacy is working. In 2022, 39% of 23-year-olds owned stock versus 31% of 23-year-olds in 2007, according to Ana Hernández Kent, a senior researcher at the Federal Reserve Bank of St. Louis. Stock balances for Gen Z were also higher, with a median of $4,400 versus $3,900 for millennials. “While these differences are small, the earlier start for some Gen Z households can translate into more powerful compound earnings,” Kent said.

The attraction of IRAs

More young people are contributing to an individual retirement account, in addition to their 401(k), said Nilufer Gok, a research manager at the Center for Retirement Research at Boston College. Of those who contribute to an IRA or Roth IRA, 41% were under 40 in 2022, up from 28% in 2016, according to data from the center. (Anyone under the age of 50 with earned income can contribute up to $7,000 to a traditional or Roth IRA in 2025.)

That trend could be attributed to fintech platforms that promote these saving vehicles and make it easier to open them, Gok said. Search “young people and IRA” on YouTube, TikTok or Reddit, and there is no shortage of content saying that opening an IRA can help you retire sooner.

Lind opened his first Roth IRA at 22. He estimates he’s saving about 21% of his six-figure salary for retirement by contributing the maximum amounts to his Roth IRA and his 401(k), which is well above the average savings rate of 14.1%, according to Fidelity.

Thrifty Gen Z women

The TIAA report showed that more Gen Z women (54%) were saving for retirement in 401(k)s than men (44%).

Viktorin said that number was “very, very encouraging” for Gen Z women. Historically there has been a gender gap in retirement savings, with women having about 30% less money in retirement than men. But if women continue to save at this rate, the gap could start to close, she said.

“It’s exciting to see that women are saving just that little bit more than their male counterparts,” Evans said. But, she added, if these Gen Z women go on to become caregivers for their children or parents, that could reduce their ability to save.

Gen Z men’s appetite for risk

Gen Z men are more comfortable investing because many have been doing so on the Robinhood app for years, said John Darby, an associate at Graham Capital Wealth Management in Tampa, Florida. “They probably opened up a Robinhood account on the first day that they turned 18, so they have an increased appetite for risk,” Darby said.

He speaks from experience: Darby, 26, opened a Robinhood account when he turned 18. “It definitely helped me learn a little bit more about trading,” he said. Only about 37% of investors on Robinhood self-identify as women, Liss said.

While Gen Z women are getting better at investing, they tend to be a bit more cautious than men. Many more of Darby’s young female clients have expressed concern about the jittery stock market, compared with his young male clients.

Lind said he viewed the drop in the S&P 500 in April “as a buying opportunity.”

Which strategy will prevail?

Because Gen Z women favor more conservative financial vehicles, such as 401(k)s and IRAs, there is some possibility that Gen Z men’s investments will result in higher yields, causing the gender wealth gap to widen.

But given that Gen Z men make more aggressive investments outside their 401(k), it will all come down to the markets over the next couple of decades.

“Imagine that we do have a long-term bear market,” Darby said. In a slow-growth environment, Gen Z women’s 401(k) contributions could surpass what men earn with riskier investments, he said.