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Gen Z, Millennials Are Relying On Crypto For Their Retirements
Luke MacGregor/Bloomberg via Getty Images

Millennials and members of Generation Z are relying heavily upon cryptocurrencies for their retirement savings, according to a poll released earlier this month.

The 2022 Investopedia Financial Literacy Survey asked over 4,000 American adults in the Gen Z, Millennial, Generation X, and Baby Boomer generations about their saving, investing, and taxpaying habits. Among other findings, the investment dictionary revealed that 28% of Millennials — those between the ages of 26 and 41 — expect to use cryptocurrencies to support themselves in their latter years. Nearly 20% of Gen Z — those between 18 and 25 years old — said the same.

Gen Z, Millennials, and Gen X also foresee their cryptocurrency assets yielding stronger returns than their holdings in stocks, real estate, or mutual funds.

“For younger investors, cryptocurrency is clearly not just a fun asset to trade in order to make fast money,” Investopedia editor-in-chief Caleb Silver explained. “They are depending on generating returns from cryptocurrency to build wealth and fund their retirement, which is concerning given the lack of education around investing in crypto, and the fact it is still not regulated by the industry.”

Indeed, just over one quarter of American adults reported that they have “advanced” knowledge of cryptocurrency — a form of decentralized digital money that can be transferred between users’ virtual wallets — while 49% have “beginner” knowledge.

Meanwhile, only 49% of Americans have “advanced” knowledge of paying taxes. 47% have “advanced” knowledge of saving, 45% of borrowing and managing debt, and 36% of investing.

Young Americans also expect to stop working at younger ages than their parents and grandparents. The median age at which Gen Z expects to stop working is 57; for Millennials, Gen X, and Boomers, expected ages are 61, 64, and 68, respectively.

“Our relationship to money, investing and financial planning has radically changed in the past few years, as new asset classes like crypto and NFTs have emerged just as millions of people are taking their first steps into investing,” Silver added. “What hasn’t changed is the need for relevant financial education — but in a modernized curriculum that addresses these new financial products and services, designed to serve the people who are dependent on them to build their wealth.”

Data from credit bureau Experian released in 2019 show that the average American household finds itself in $90,460 in debt — from mortgages and student debt to credit cards and personal loans. Members of Gen Z owe an average of $9,593; Millennials, Gen X, and Boomers respectively owe $78,396, $135,841, and $96,984.

Research from the Federal Reserve Bank of Minneapolis indicates that “financial literacy reduces exposure to housing and consumption debt” and “reduces the prevalence of bankruptcy,” while leading to “a lower likelihood of having any outstanding debt.”

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