Generation Alpha, the cohort born from 2010 onwards, is growing up in a rapidly evolving world—one where technology shapes nearly every aspect of life, and social and environmental changes are making an impact in ways we’ve never seen before. As the first entirely 21st-century generation, Generation Alpha will face unique challenges and opportunities. One of the big questions on the horizon is: will they save as much for retirement as their predecessors?
While Generation Alpha is still in school and not yet earning an income, their approach to saving for retirement is being influenced by the financial habits, experiences, and mistakes of previous generations. Let’s explore what their financial future might look like, how it could differ from those before them, and whether they’ll save enough for retirement.
1. How Different Generations Have Approached Retirement Savings
To understand Generation Alpha’s potential financial habits, it’s helpful to first look at how other generations have handled retirement savings:
- Baby Boomers (born 1946–1964): The Baby Boomers are now either retired or on the verge of it. They grew up during a time of economic expansion, but many didn’t save as much as they needed for retirement. A survey from 2020 found that only 29% of Boomers had saved $250,000 or more for their golden years. That’s far short of what many financial experts recommend.
- Generation X (born 1965–1980): Often called the “forgotten generation,” Gen Xers faced economic struggles like the dot-com bust and the 2008 financial crisis during key working years. As a result, a significant portion of Gen X is behind on retirement savings. In fact, about 48% of them are believed to be lagging in their savings efforts.
- Millennials (born 1981–1996): They’ve had their own set of challenges, including starting their careers in the aftermath of the 2008 crisis, and more recently, dealing with the financial impact of the COVID-19 pandemic. Despite this, about 60% of Millennials are actively saving for retirement, though many are juggling this with paying off student loans and high living costs.
- Generation Z (born 1997–2009): Although they’re just starting out in the workforce, Gen Zers are showing impressive financial foresight. A recent survey found that 37% of Gen Z workers are already contributing to retirement accounts like 401(k)s or IRAs, despite being early in their careers.
So, where does this leave Generation Alpha? While they’re still kids now, the world they grow up in and the financial tools at their disposal will greatly shape their approach to retirement savings.
2. Technology and Its Role in Generation Alpha’s Financial Habits
One of the biggest differences for Generation Alpha is the role technology will play in shaping their financial future. Growing up surrounded by smartphones, apps, and digital solutions means they’ll have access to tools that could make saving for retirement easier and more efficient.
- Automation Through Fintech: Financial technology (fintech) is already making it easier to save, invest, and manage money. By the time Generation Alpha enters the workforce, it’s likely they’ll be using apps and tools that automate much of their financial decision-making. Imagine apps that not only remind them to save but do it automatically—rounding up every purchase or setting aside a percentage of their income without them having to think about it.
- Digital Banking: With more banking services moving online, traditional banks might not be a part of Generation Alpha’s daily experience. Instead, they’ll likely use digital-first or even fully digital banks, which allow for instant access to savings accounts, investment portfolios, and more.
- Financial Education: Thanks to advancements in edtech (educational technology), Generation Alpha will likely receive financial literacy lessons in school, which can make a huge difference. In fact, financial education is already being pushed as a core subject in many schools today, setting the stage for a generation that could be more financially literate than any before.
3. The Challenges Generation Alpha Will Face in Saving for Retirement
While the outlook for Generation Alpha seems bright in many ways, they will also face some serious challenges when it comes to saving for retirement.
- Rising Cost of Living: Housing prices, healthcare, and education costs are increasing at a rate faster than wage growth. This is already a problem for Millennials and Gen Z, and unless major changes are made, Generation Alpha will likely face the same or even steeper costs. Saving enough for retirement while dealing with high living expenses will be no small feat.
- Gig Economy Growth: We’re seeing a shift away from traditional 9-to-5 jobs, and by the time Generation Alpha enters the workforce, the gig economy could be even more widespread. Freelancers, independent contractors, and those without employer-sponsored retirement plans will need to be even more proactive about saving for retirement. Unfortunately, many gig workers today aren’t saving enough, and Generation Alpha may face the same challenge if they follow this career path.
- Climate and Political Uncertainty: Climate change is expected to have significant economic consequences, which could impact everything from job opportunities to the cost of living. Additionally, political instability and economic shifts may create uncertainties for Generation Alpha’s financial future.
4. Changing Social Attitudes Toward Saving and Retirement
One promising factor for Generation Alpha is the changing attitude towards financial transparency. Millennials and Gen Z have already embraced openness around money, talking about salaries, savings strategies, and investments in ways that were once considered taboo. Financial influencers, podcasts, and blogs are encouraging this openness, and it’s likely Generation Alpha will grow up in an environment where talking about money is normal and encouraged.
However, the very idea of retirement may change for this generation. Traditional retirement, where someone works until they’re 65 and then stops entirely, is no longer the only option. Generation Alpha may lean towards “flexible retirement”—a mix of part-time work, passion projects, or even periods of work and leisure well into older age. This could affect how much they save and when they start.
5. What Can We Expect from Generation Alpha’s Retirement Savings Habits?
Given the trends we see today, Generation Alpha could approach retirement savings with some key differences:
- Earlier Saving Start: Following the lead of Generation Z, who have already begun saving earlier than their predecessors, Generation Alpha might begin saving for retirement in their early 20s or even sooner. In fact, 62% of Gen Z workers who are saving for retirement started before age 24, and Generation Alpha may be even more financially proactive.
- Reliance on Technology: Expect Generation Alpha to lean heavily on digital financial tools. With apps for budgeting, saving, and investing already at their disposal, their ability to track and grow their savings will be much more streamlined than for previous generations.
- Diversified Investments: With the rise of alternative investments like cryptocurrencies, real estate crowdfunding, and peer-to-peer lending, Generation Alpha might be more willing to diversify their retirement portfolios beyond traditional stocks and bonds.
6. Will Generation Alpha Save Enough for Retirement?
It’s hard to say for sure whether Generation Alpha will save as much as they need for retirement. On the one hand, they have access to more information, technology, and financial tools than any generation before them. On the other hand, rising living costs and economic uncertainties may make it harder for them to set aside the recommended amounts.
One thing is clear: the traditional view of retirement is evolving. Generation Alpha may not aim to retire at 65 like previous generations. Instead, they could prioritize achieving financial independence earlier in life, allowing them to work less or pursue projects they’re passionate about later in their careers. This mindset shift could lead to different savings goals, with a focus on flexibility rather than a hard stop to working life.
7. Conclusion
Generation Alpha is growing up in a world full of promise, technology, and change. While they’re facing significant challenges like rising costs and economic uncertainty, they also have powerful tools and knowledge that previous generations didn’t. Their approach to saving for retirement is likely to be more strategic and tech-driven, but it’s still unclear whether they’ll save as much as they need to.
The most likely scenario is that they’ll redefine retirement altogether—focusing on flexibility, financial independence, and balancing work with personal fulfillment. While they may not save in the same ways as Boomers or Gen X, they’ll have the tools to create a financially secure future, whatever retirement may look like by then.