Republican presidential candidate Chris Christie's recent call to raise the retirement age has sparked a generational standoff with Gen Z over the future of America's retirement system.
Gen Z's growing disillusionment with the promise of Social Security is highlighted by Christie's comments from an NBC News presidential debate earlier this month. Both Christie and fellow Republican presidential candidate Nikki Haley said they'd lift the retirement age, which is now 67, to 70.
Even though Social Security's future for Gen Z retirees remains in question, the generation wants to retire earlier than previous generations, leaving them to rely on personal savings and investment plans.
"There are only three things that go into determining whether Social Security can be solvent or not; retirement age, eligibility for the program in general and taxes," the former New Jersey governor said during the debate before laying out his plan to solve the crisis, which would be to raise the retirement age by a few years for people in the 30s and 40s. Haley suggested raising it for those in their 20s as well.
The proposal didn't resonate well with the Gen Zers Newsweek spoke to.
"The idea of relying on Social Security feels like a gamble. I'm focusing on my savings and investment plans instead," Palmer Careen, a 25-year-old recent graduate from the University of Chicago, shared with Newsweek. "Christie's suggestion seems disconnected from our reality."
Austin Scarpelli, a 23-year-old University of Illinois student, voiced similar concerns, telling Newsweek that he is "already resigned to the fact that Social Security might not be there for us. Hearing about raising the retirement age just adds to my worries."
Gen Z Recognizes Challenges
An October survey from Charles Schwab on retirement expectations doubled down on the sentiment of the Gen Zers Newsweek spoke with, finding that the generation is aware of the challenges ahead. Despite their young age, 99 percent of Gen Z workers, aged 21 to 26, acknowledge hurdles in their path to saving for retirement.
Gen Z said its challenges for retirement savings are multifaceted, and include inflationary concerns, monthly bills, and unexpected expenses, according to Schwab. Those factors, coupled with their ambitious goal to retire by age 61, place them in a precarious position.
Brian Bender, head of Schwab Workplace Financial Services, noted that "they're just starting out, so it's no surprise that they may feel greater financial pressure, especially with such an ambitious timeline to retirement."
Growing Concerns About Social Security
Christie's suggestion stems from a growing concern about the sustainability of the Social Security system, a system feared to be depleted by 2035. With an aging population, raising the retirement age is viewed by some policymakers as a pragmatic approach to extend the fund's solvency.
While Christie's proposal aims to address the financial challenges facing Social Security, it also reflects a broader debate about balancing the needs of current and future retirees against the realities of demographic and economic changes.
This is where Gen Z's concerns intersect, as they and the millennial generation are the ones who will be directly impacted by such policy changes, which casts a shadow of uncertainty over their future retirement plans.
Taking Retirement Seriously
In line with Careen's focus on personal savings and investment, the Schwab survey also indicates a heightened interest among Gen Z in taking an active role with investing. The generation is increasingly seeking out investment opportunities and personal finance advice, showing a proactive approach towards building their retirement funds.
According to Schwab, 83 percent of Gen Z workers are interested in receiving personalized advice for their 401(k) investments, a sign of their commitment to effective retirement planning.
Gen Z's approach to retirement is marked by a blend of traditional and innovative strategies. While they grapple with the realities of a potentially unreliable Social Security system and the challenges of the current economic environment, their willingness to explore new avenues for financial stability and growth points to a dynamic and adaptive approach to planning for the future.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Aj Fabino is a Newsweek reporter based in Chicago. His focus is reporting on Economy & Finance. Aj joined Newsweek ... Read more
