visimoney
TLDR:
Gen Z is not as financially irresponsible as stereotypes may suggest, with studies showing they have more assets in retirement plans compared to Gen X at the same age. This is partly due to advancements in retirement plan designs influenced by behavioral economics.
Article Summary:
Gen Z is often criticized for being financially irresponsible, but a new study by the Investment Company Institute (ICI) shows that Gen Z households have almost three times more assets in retirement plan accounts than Gen X households did at the same age. This indicates that Gen Z may be more financially savvy than previously believed.
One of the key factors contributing to Gen Z’s strong financial standing is the advancements in retirement plan designs, influenced by behavioral economics. Retirement plans are now opt-out instead of opt-in, with auto-escalation options and fewer investment choices to prevent analysis paralysis.
These improvements in retirement plan designs have been attributed to the insights of behavioral economics OG’s Richard Thaler and Cass Sunstein. Overall, Gen Z’s financial fitness may not be solely due to their moral superiority, but rather advancements in the financial system that all generations can benefit from.
Ultimately, the article suggests that it is important to set aside generational stereotypes and credit the advancements made by previous generations that benefit all individuals, regardless of age.
