Gen Z and millennial investors (ages 18 to 35) behave differently than their older counterparts—with the most obvious differences due to their generation’s interest in cryptocurrencies and other products of our new decentralized financial systems, or DeFi.
But one marked difference is as old as time. Because, in fact, it’s time itself: Simply keeping your money consistently invested for decades beats nearly every other investment strategy. And it is young women who are taking advantage of this “timely” tactic. According to Fidelity’s 2022 Money Moves Study, women between the ages of 18 and 35 opened brokerage accounts at an average age of 21, compared to women ages 36 and older who say they opened brokerage accounts at the age of 30, on average.
The bottom line: Not only are young women more aware of the need to invest in their futures, but they’re actually doing something about it—while still teenagers, in some instances.
Learning From Generations Past: What Not to Do
If retirement-aged women could tell their younger selves anything about investing and preparing for retirement, what would it be? According to the same study, many wish they got started earlier. In fact, around 36% of women regret waiting too long to start saving for retirement.
The monetary value of not waiting to invest is in the math: If you started investing just $50 per month at age 25, you could have about $144,000 by the time you’re 67, estimating an average return of 7%. If you waited until you were 40 to start investing $50 per month, you’d only have $46,000 by age 67. And if you were able to triple the amount you started saving at the age of 25 to $150 a month, adding about $4 more per day, your nest egg would top $450,000.
More good news: Women are enjoying immediate rewards for taking control of their financial lives as well. A reported 30% of women over the age of 36 say they’re most proud of being financially independent, versus 22% of men. And this is despite the gender wage gap, which results in women earning anywhere from $0.58 to $0.83 for every dollar a man earns.
It’s Never Too Early—or Too Late
Wondering how you can start your investing journey sooner rather than later—or increase your efforts no matter your age? Here are three easy steps to consider.
1. Do the math. One quick way to get pumped about getting started is to use the government’s Compound Interest Calculator, which calculates how much money you could make by contributing even small monthly amounts to your investment accounts. Never has math been so much fun!
2. Look into tax-advantaged investment options first. If you’re employed by a company that offers a 401(k)—or better still, matches your 401(k) contributions—start there. However much you invest every year reduces your taxable income by that amount (you’ll pay less in taxes, in other words) while growing tax free. Don’t have a 401(k) or its nonprofit equivalent, the 403(b)? Open an IRA with contributions that, like employer plans, reduce your taxable income. IRA accounts also grow tax free, and you can open one even if you have a 401(k) or 403(b). Government-imposed contribution limits are here, along with information about your various IRA options.
3. Invest in a CD or high yield savings account. If you’re worried about waiting decades before having access to your money—fees are imposed for early withdrawals from these retirement accounts—more flexible options are offered by banks, including high yield savings accounts, money market accounts and certificates of deposit (CDs). Have a savings goal you’d like to reach? There is a calculator for that too!
Millie content is licensed from Meredith Corporation, publisher of Millie, Real Simple, InStyle and more.
Choncé Maddox is a freelance writer living in the Midwest who loves to tell stories that spark healthy conversation. Her work has been featured on Business Insider, Buzzfeed, Fox Business and the New York Post.