This Indulgent Retirement Trend Is Popular Among Young Professionals — But Financial Planners Are Providing a Dose of Reality Gen Z is spending more on non-essential purchases like travel and entertainment.

By Amanda Breen

Key Takeaways

  • Gen Z is gravitating toward "soft saving," putting away less money for the future so they can spend more in the present.
  • Financial planners support spending on things that make you happy — but finding a balance for long-term stability.

A "soft life," or one that values comfort and well-being above all else, is gaining traction among the younger generations — and impacting their retirement plans.

Generation Z is particularly embracing "soft saving," socking away less money for the future to spend more in the present, according to an Intuit Prosperity Index Study reported by CNBC Make It.

Related: 3 Ways Gen Z CEOs are Crushing Stereotypes | Entrepreneur

Nowadays, young investors are funneling money into causes that align with their personal views and prioritizing a better quality of life over additional cash in savings accounts, the report found. They spend more on hobbies and non-essential purchases, like travel and entertainment, than Gen X and boomers.

And it's leading some financial planners to issue warnings about the importance of balance.

"Spending money on things that truly make you happy is great … [but] people should satisfy their near-term needs and stay on track with their long-term goals before spending freely," Andy Reed, head of investor behavior at investment management firm Vanguard, told CNBC.

Tim Melia, certified financial planner at Embolden Financial Planning LLC, shared a similar perspective with U.S. News & World Report: "To be sure, a balance needs to be found. A sound financial plan needs to be in place to assure comfort and solvency in our later years. But that equation becomes different if people choose to work further into what were once traditional retirement years."

Related: 5 Simple Tips for Incorporating Gen Z Into Your Workplace

But it's not all bad news for young professionals: Gen Z and millennial savers who don't subscribe to the "soft saving" strategy might actually be on track for a better retirement than Gen X and baby boomers, thanks to increasing automatic enrollments in 401(k) plans.

Amanda Breen

Entrepreneur Staff

Features Writer

Amanda Breen is a features writer at She is a graduate of Barnard College and received an MFA in writing at Columbia University, where she was a news fellow for the School of the Arts.

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