How is Gen Z investing for retirement? Ask an influencer.

By Jessica Hall

As seasoned investors know, one of the best ways to get rich in retirement is to start saving and investing early. But how should this message be communicated to the real young people? For Gen Z investors, it’s TikTok.

With Gen Z prioritizing TikTok and YouTube over Google (GOOGL) for searches, it becomes more difficult to attract young investors who are constantly bombarded with digital content.

Nearly 40% of Gen Z – those born between 1997 and 2012 – go to TikTok for online searches, according to internal Google data, which was reported by TechCrunch.

“Buying Wall Street Journal ads won’t reach that market. You have to go where they are,” said Eric Johnson, a business professor at Columbia University’s Columbia Business School.

Johnson said Gen Z has greater uncertainty that Social Security will be there for them. This means they may need to start saving on their own earlier and become more investment savvy. Gen Z is also starting to invest in a time of economic uncertainty and rising inflation, making their financial beginnings more turbulent.

“There’s a big difference between investing and saving for retirement,” Johnson said. “What works for retirement savings is making saving as automatic as possible and not touching the money. And that can be tough for a generation bombarded with shiny, shiny things all the time. time.”

According to the Investopedia 2022 Financial Literacy Survey, Gen Z plans to stop working at age 57, compared to 64 for Gen X (born between 1965 and 1980), and are the next generation to retire.

Yet only 7.7% of Gen Zers between the ages of 15 and 23 had a retirement account in 2020, compared to 49.5% of millennials between the ages of 24 and 39, according to the US Census Bureau. Nearly 18% of millennials (born between 1981 and 1996) had retirement accounts between the ages of 15 and 31.

“The best way to reach them is to speak their language and clarify the value of what you’re saying. Trending and ‘gotcha’ content is great, but Gen Z really wants to know how to mature properly,” Haley said. Sacks, who is known as Mrs. Dow Jones. “I think my followers are pretty smart. The idea of ​​abstaining for the younger ones – I didn’t find that at all.”

Gen Z is an active investment group, however. According to the 2022 Investopedia Financial Literacy Survey, more than half of Gen Z adults are already invested, with 26% of this group invested in the stock market.

The survey found that almost 40% of Gen Z investors get investment information from YouTube, and another one in four turn to TikTok and Instagram. But 47% of millennial investors favor internet research.

Meanwhile, a March 2021 survey by CreditCards.com found Gen Z investors were nearly five times more likely to say they receive financial advice from social media than adults aged 41 and older. , with 28% turning to friends and online influencers for advice.

Fidelity Investments launched its TikTok channel in June 2021, approaching it as an educational resource that young investors could not just check out once, but come back to again and again.

“We know that many of our young investors are on social platforms like TikTok, Instagram and Reddit. This is a generation that is hungry for financial content and having conversations on social platforms,” ​​said Kelly Lannan, vice -Senior President of Fidelity Emerging Clients.

“We knew that to be relevant on TikTok, we needed to create small content aimed at young audiences. We also understood that financial topics can be difficult to grasp, so we sought to break down the terms so that they were accessible and affordable,” says Lannan.

Fidelity also continues to innovate in the way it interacts with customers and provides financial education, through platforms such as a Web 2.0 space like TikTok, or Web 3 like the Metaverse, Lannan said.

Fidelity found in a recent survey that 41% of Gen Z turn to social media influencers for investing education – more than other generations such as Millennials or Gen X. As a result, Fidelity works with a handful of influencers on TikTok, such as @chandlerisaac, @olivialmarcus, @nicktalksmoney, @faaresq and @calltoleap, to tap into their already amassed audiences and share his financial expertise.

Yet regardless of age or platform, the savvy advice on investing remains the same.

“When it comes to advice, we consider age to be less important than wealth, goals and preferred engagement model,” said Colleen Jaconetti, senior investment strategist at Vanguard. “For those who are just starting out or those who may not have amassed a lot of wealth, it makes sense to approach them online or with a bot-like platform. As they go through life and their situation becomes more complex, an in- approach to the person makes sense.”

Jaconetti said the advice, regardless of marketing platform, is the same for anyone of any generation: spend less than you earn, have a budget, take advantage of matching contributions, have an emergency fund, pay back your debts and save 12% for 15% of your earnings.

Vanguard reaches investors in a variety of ways, such as blogs, email marketing, LinkedIn and Twitter, Jaconetti said, but hasn’t delved into TikTok yet.

Gen Z has both the blessing and the curse of a lot of financial information available, Sacks said.

“Gen Z is more digitally equipped than any generation. They are also in a period of economic turbulence, inflation, and uncertain and unstable times. Being able to eliminate all content – ​​and there is more content than ever before – is important,” Sacks said.

“A big part of retirement success is keeping your head down and slowly and steadily winning the race. Everyone has a desire to get rich quick, but the best thing is a more measured approach,” Sacks said. “Retirement and the decision to stop working is the most important and costly decision you can make.”

-Jessica room

 

(END) Dow Jones Newswire

09-10-22 1506ET

Copyright (c) 2022 Dow Jones & Company, Inc.

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