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Generation Z Faces Record Inflation and Eroded Wages: 38% Have Already Withdrawn Retirement Funds, and Many Cut Meals to Pay Rent and Survive in the U.S. Check Out the Data on the New Reality of Generation Z.
With each economic crisis, a generation becomes the target of unfair comparisons. The same has been true for Generation Z. Born between the mid-1990s and 2010, they grew up in an environment marked by digital advancements, but also by successive crises: pandemic, global inflation, war in Ukraine, currency devaluation, and stagnant wages.
The common narrative is that “they don’t know how to handle money,” that they are consumers, credit-dependent, and incapable of planning for the future. But recent research shows that the problem lies not only in behavior, but in the stifling economic reality that pushes young people to make extreme decisions — such as cutting meals, delaying medical bills, or even prematurely withdrawing retirement funds.
38% of Young People Have Already Withdrawn Early Retirement Funds in the U.S.
A study by Payroll Integrations, cited in the Xataka report, reveals that 38% of workers from all generations in the U.S. have already withdrawn part of their retirement funds to pay off debts or immediate expenses.
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The most shocking data: Generation Z leads this movement, being the age group that has most resorted to this practice.
In theory, these funds should be the security of old age. In practice, they have become a last resort to face costs of housing, food, and healthcare. For many, it is a cruel dilemma: ensuring the basics today or preserving the future.
Cutting Meals to Pay Rent
Another survey cited in the report, this time from Redfin, shows that young people between the ages of 18 and 29 are giving up complete meals to be able to pay for rent and essential bills.
The phrase “skipping lunch” stops being a metaphor to become a survival strategy. This dismantles the idea that Generation Z’s financial problems are solely due to “lack of planning.” When income does not keep up with inflation and the cost of urban living skyrockets, there is no Excel spreadsheet that can manage.
The Invisible Inflation That Erodes Wages
While critics point to spending on technology, streaming, or leisure, the reality is that the major villains of Generation Z’s budget are the same ones that affect any worker:
- Housing: rising rents, especially in major cities, consume up to 40% of monthly income;
- Food: the price of basic food items is hitting records in several countries, including Brazil;
- Healthcare: medical consultations and private plans have become increasingly inaccessible for those just starting their careers;
- Education: tuition and training costs drain a significant part of the income of younger individuals.
Thus, when little or nothing is left for savings, it is not a case of irresponsibility — but of a structural trap.
The Difference Between Generations: Baby Boomers, Millennials, and Z
The contrast between generations helps to understand the weight of the critique.
- Baby Boomers: entered the job market during a time of more stable wages and relatively affordable housing.
- Millennials: experienced the 2008 crisis and the beginning of job insecurity, but still found expanding markets.
- Generation Z: entered the job market during the pandemic, with global inflation and increasingly precarious jobs.
This historical difference dismantles the narrative that “just save more” — because the ratio between income and cost of living has changed radically.
Consequences for the Future of Retirement
The early withdrawal of retirement funds is a serious symptom. The sooner this resource is used, the smaller the amount accumulated over a lifetime.
In other words: Generation Z risks reaching old age without savings, perpetuating cycles of poverty.
Experts are already talking about a “generation without retirement”, not due to a lack of discipline, but because the mathematics of the pension system does not add up against immediate needs.
The New Reality of Generation Z
What we see is a generation forced to live with extreme dilemmas:
- Cutting meals to pay rent;
- Giving up health to maintain education;
- Withdrawing retirement funds to cover basic expenses.
This portrait is not of an unprepared youth, but of a generation in economic survival mode, carrying the marks of an adverse global scenario.
The Xataka report brings to light an uncomfortable truth: Generation Z is not financially unprepared; it is simply the generation facing the harshest reality of the 21st century. Amidst cuts in meals, withdrawals from retirement, and difficulty accessing housing, survival outweighs planning.
The criticism that they “don’t know how to handle money” loses strength when confronted with numbers, research, and the reality of everyday life. The real question is: how to build a future in a present that already demands the essentials?
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