An advisor highlights the power of investing for Gen Z in building wealth.

• On average, Generation Z is starting to invest at the age of 19, which is notably younger than previous generations.
• If you set aside $5,000 annually starting at age 19, you could potentially earn $500,000 more at retirement than someone who started at age 25.
• Americans generally place more trust in financial advice from advisors and accountants compared to social media finance influencers.

Early investment is advantageous for Gen Z, as they are beginning to invest at a young age.

On average, Gen Z adults started investing and saving at the age of 19, which is younger than both baby boomers and millennials.

""Investing has the ability to increase wealth through the power of time, compounding, starting early, and starting small, as stated by Rob Williams, a certified financial planner and managing director of financial planning at," said Rob Williams."

Inflation breakdown for May 2024 is presented in a single chart. The Federal Reserve maintains interest rates. First-time homeowners may be caught off guard by maintenance costs.

In March, Schwab surveyed 1,000 Americans, aged 21 to 75, and found that Gen Z comprises individuals born between 1997 and 2012.

The financial benefit of starting to invest early

Beginning to save for retirement at a young age can result in significantly more money accumulated over time compared to starting later in life.

If you set aside $5,000 annually and earn an average annual return of 7%, starting at age 25, you could end up with approximately $998,000. However, if you begin at age 19, despite contributing $30,000 more, you may end up with more than $1.5 million. Delaying until age 30 would result in about $691,000.

An effective way for young individuals to amass wealth is through opening an individual retirement account that accepts after-tax contributions, commonly referred to as a Roth IRA. With a Roth IRA, contributions are made with after-tax dollars, resulting in tax-free growth. In retirement, the funds can usually be withdrawn without owing taxes.

"Ed Slott, an IRA expert and certified public accountant, advised that every young person should set up a Roth IRA or Roth 401(k) as soon as they get their first job, especially if they qualify. This will help them establish a habit of saving for retirement and watching their account grow over time."

Trust advisors, not TikTok

The report by Schwab reveals that Gen Z's confidence in investing is largely due to the increasing availability of financial resources. Specifically, 28% of Gen Z says they learned about investing in school, compared to 19% of millennials and 12% of Gen X.

While older generations did not have access to the abundance of information available online and on social media at early ages, experts advise seeking advice from a trusted financial advisor before relying on such sources.

"Williams stated that while there is a wealth of information available, it does not necessarily translate to knowledge or context. He compared the allure of certain market parts to an ice cream cone, while a balanced diet is necessary for long-term investment health."

Many Americans are scrolling past the "finfluencer" content on their TikTok "for you" pages.

A majority of Schwab survey respondents (57%) said they are more likely to engage with a financial advisor for financial advice than follow finance influencers (38%) and have no impact from social media on their investments (65%).

Should people with student loans be investing?

The amount of federal student loan debt held by young people aged 24 and below is $99 billion, according to U.S. Department of Education data from the second quarter of 2024. This figure is even higher at $490 billion for borrowers aged 25 to 34.

However, experts say it shouldn't hold anyone back from investing.

"Waiting until being debt free to act would prevent any action, according to Slott," said.

Balancing debt repayment and saving for future goals is crucial. Williams advises individuals to pay the minimum amount due on their loans and begin small with retirement savings, even if it means setting aside only $100 per month.

As more payments are made and the student loan debt decreases, he stated, "you'll have more from your budget to contribute to retirement savings, which will continue to grow."