Fidelity Report Shows Gen Z and Millennial Saving Trends

Fidelity Investments released its second-quarter Building Financial Futures report detailing divergent retirement saving patterns between millennial and Generation Z clients. Millennials are approaching a major wealth milestone with average retirement account balances of $94,300, whereas Gen Z clients average $20,800.

The data indicates that younger workers receive lower employer contribution rates than older generations. Gen Z receives an average contribution rate of 4.1%, while millennials receive 4.8%.

Gen Z exhibits a strong preference for simplified investing, with 80% of the group allocating all assets to target date funds. This generation is also increasing its savings rates more aggressively than other age groups. This trend is potentially driven by the SECURE 2.0 Act, which mandated automatic savings rate increases for many new 401(k) accounts established after December 28, 2022.