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A growing share of Gen Z adults don’t think they’ll retire

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Gen Z is the youngest generation of adults today, but with many struggling to make ends meet, a growing proportion say they do not expect to retire and few are socking away money to do so.

A new report from the TIAA Institute and UTA’s NextGen Practice found that a greater share of these adults age 27 and below do not anticipate retiring – at least in the traditional sense – after prior data showed nearly half of young adults either don’t want to retire, don’t believe they will be able to afford to, or are not thinking about it at all.

Man commuting to work

Gen Z as a whole has a very different view of retirement than previous generations, and a growing proportion of young adults say they do not plan on retiring at all. (iStock / iStock)

What’s more, just 20% of Gen Z respondents of working age say they are saving for retirement at all. While planning for retirement is important for everyone, saving for the future is critical for this generation that is projected to live past 100 years old. Yet, a higher cost of living could be impacting their ability to do so.

The study found that almost one-third of Gen Z (29%) are living paycheck-to-paycheck, with most of their money going to funding their basic needs, making it increasingly difficult for them to achieve financial milestones like homeownership while saving for their financial futures.

THIS AVOIDABLE SPENDING HABIT IS CREATING A RETIREMENT ‘CRISIS,’ FINANCIAL EXPERT WARNS

“Thirty-six percent of respondents cited high debt or low income as the primary reason they are not saving for retirement,” Surya Kolluri, head of the TIAA Institute told FOX Business. “Gen Z is spending more on essentials than previous generations.”

Anxiety at work

Inflation is weighing on Gen Z’s finances more than prior generations, data shows. (iStock / iStock)

Kolluri said it is true that Gen Z is bearing the brunt of inflation more than the generations that preceded them, noting that as of this year, the annual inflation rate for Gen Z was half a percent higher than it was for other generations at the same age. 

SILVER CEILING: CAREER EXPERT WARNS DELAYED RETIREMENT TREND COULD HAVE ‘RIPPLE EFFECT’ ON YOUNGER GENERATIONS

But Kolluri pointed to some positive findings in the data, too. He said that while only 1 in 5 reported saving for retirement, 66% of those who are saving for retirement are doing so through 401(k)s

There is also at least an awareness amid Gen Z’ers that it is important to save for the future. Eighty-four percent report saving a portion of their income each month (albeit not for retirement), and 57% say they have a budget that they stick to.

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Kolluri noted 52% of Gen Z reported putting savings into savings accounts because they value the liquidity that supports current financial freedom. 

“They do not equate saving for retirement as helping to ensure their financial freedom later in life…and ‘freedom’ is a concept that is very important to Gen Z,” he said. “They want flexibility and access to savings if and as they want.”

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Powell sees tariffs raising inflation and says Fed will wait before further rate moves

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US Federal Reserve Chair Jerome Powell holds a press conference after the Monetary Policy Committee meeting, at the Federal Reserve in Washington, DC on March 19, 2025. 

Roberto Schmidt | Afp | Getty Images

Federal Reserve Chair Jerome Powell said Friday that he expects President Donald Trump’s tariffs to raise inflation and lower growth, and indicated that the central bank won’t move on interest rates until it gets a clearer picture on the ultimate impacts.

In a speech delivered before business journalists in Arlington, Va., Powell said the Fed faces a “highly uncertain outlook” because of the new reciprocal levies the president announced Wednesday.

Though he said the economy currently looks strong, he stressed the threat that tariffs pose and indicated that the Fed will be focused on keeping inflation in check.

“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said in prepared remarks. “We are well positioned to wait for greater clarity before considering any adjustments to our policy stance. It is too soon to say what will be the appropriate path for monetary policy.”

The remarks came shortly after Trump called on Powell to “stop playing politics” and cut interest rates because inflation is down.

There’s been a torrent of selling on Wall Street following the Trump announcement of 10% across-the-board tariffs, along with a menu of reciprocal charges that are much higher for many key trading partners.

Powell noted that the announced tariffs were “significantly larger than expected.”

“The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” he said. “The size and duration of these effects remain uncertain.”

Focused on inflation

While Powell was circumspect about how the Fed will react to the changes, markets are pricing in an aggressive set of interest rate cuts starting in June, with a rising likelihood that the central bank will slice at least a full percentage point off its key borrowing rate by the end of the year, according to CME Group data.

However, the Fed is charged with keeping inflation anchored with full employment.

Powell stressed that meeting the inflation side of its mandate will require keeping inflation expectations in check, something that might not be easy to do with Trump lobbing tariffs at U.S. trading partners, some of whom already have announced retaliatory measures.

A greater focus on inflation also would be likely to deter the Fed from easing policy until it assesses what longer-term impact tariffs will have on prices. Typically, policymakers view tariffs as just a temporary rise in prices and not a fundamental inflation driver, but the broad nature of Trump’s move could change that perspective.

“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent,” Powell said. “Avoiding that outcome would depend on keeping longer-term inflation expectations well anchored, on the size of the effects, and on how long it takes for them to pass through fully to prices.”

Core inflation ran at a 2.8% annual rate in February, part of a general moderating pattern that is nonetheless still well above the Fed’s 2% target.

In spite of the elevated anxiety over tariffs, Powell said the economy for now “is still in a good place,” with a solid labor market. However, he mentioned recent consumer surveys showing rising concerns about inflation and dimming expectations for future growth, pointing out that longer-term inflation expectations are still in line with the Fed’s objectives.

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Watch Fed Chair Jerome Powell speak live on interest rates and tariffs

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[The stream is slated to start at 11:25 p.m. ET. Please refresh the page if you do not see a player above at that time.]

Federal Reserve Chairman Jerome Powell speaks Friday to the Society for Advancing Business Editing and Writing conference in Arlington, Va.

The central bank leader’s appearance, including prepared remarks and a question and answer session after, comes at a time of heightened market uncertainty regarding President Donald Trump’s aggressive tariffs against U.S. trading partners.

In March, the Fed voted to hold its benchmark interest rate steady while noting the issues over trade policy. Other Fed officials in recent days have expressed support for staying in a holding pattern until policy issues become clearer, though markets are pricing in four or five cuts this year.

Read more:
Federal Reserve is unlikely to rescue markets and economy from tariff turmoil anytime soon
Trump’s tariff gambit will raise the stakes for an economy already looking fragile
JPMorgan raises recession odds for this year to 60%

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Traders betting Fed will cut rates at least 4 times this year to bail out economy

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Traders work on the floor of the New York Stock Exchange during morning trading on April 03, 2025 in New York City. 

Michael M. Santiago | Getty Images

Traders are now betting the Federal Reserve will cut at least four times this year, amid fears Trump’s tariffs could tip the U.S. into a recession.

Odds of five quarter-point cuts coming this year jumped to 37.9%, up from 18.3% one day prior, according to data from the CME Group on Friday morning. That would put the federal funds rate to 3.00% to 3.25%, down from 4.25% to 4.50% where it has been since December.

Markets are also pricing in a roughly 32% chance the federal funds rate will fall to 3.25% to 3.50%, which would mean four quarter-point cuts from the Fed.

At the same time, the likelihood of a half-percentage point cut coming in June also jumped, to 43.8% from 15.9% previously.

The implied odds the Federal Reserve will cut aggressively rose, after Trump’s tariffs raised fears of a global trade war, and hurt economists’ forecasts for both growth and inflation. Investors are expecting that a slowdown in economic growth could spur the Fed to lower rates in a bid to avoid a recession.

However, many worry the Fed has a tough road ahead of them, as the central bank would have to cut rates in an environment where inflation has yet to go down to its 2% target. If implemented, the tariffs are expected to drive core inflation north of 3%, possibly even as high as 5% according to some forecasts.

On Friday, Roger W. Ferguson, economist and former Fed vice chair, told CNBC the Fed may not cut at all this year, saying the central bank has to worry about the inflation part of its mandate.

— CNBC’s Jeff Cox contributed to this report.

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