Gen Z Entrepreneurs Eye Roadmap to Early Retirement

A quarter of Gen Z respondents plan on retiring before the age of 55 with many turning to entrepreneurship as a path to do so. Two Gen Z entrepreneurs share how they're paving the way to business success.

This article is for educational purposes and does not constitute legal, financial, or tax advice. For specific advice applicable to your business, please contact a professional.

From day-to-day tasks to accomplish to cash flow to manage, being a small business owner often means wearing many hats. Planning ahead for the medium term, or even the long term, can be hard to prioritize. Many small business owners don’t plan for retirement at all.

According to a recent Goldman Sachs survey, however, 25% of Gen Z respondents are planning on retiring before the age of 55. The average age of retirement is about 65 years of age. Despite this, the younger generation is thinking about retirement in a different way — they might be working part-time or pursuing a passion. Another recent study by Northwestern Mutual suggests their path to retirement is less traditional, with individuals expecting to have more than one career along the way. Here are the top reasons respondents cited for moving up their retirement target:

  • Wanting to spend more time with loved ones (42%)
  • Focusing on hobbies (33%)
  • Realizing a personal mission is more important than saving more (29%)
  • Work situation has changed (28%)

This same study shows that people across demographics are proactively taking steps toward retirement by increasing savings, making a financial plan, or seeking advice from a financial advisor or family member.

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A rising tide lifts all boats

“A rising tide lifts all boats,” a phrase first popularized by John F. Kennedy, refers to the theory that improvements in the general economy will benefit all participants in that economy. This informs how Wasi Clothing owner and designer Vanessa Acosta builds toward her retirement. As she sets aside money, she is also intentional about the way she is building her clothing brand. “When I wanted to start my clothing brand, I saw different parts of the industry and how I wasn’t morally for it. So when I decided to start my business, I knew I wanted to be sustainable. I knew I wanted to be ethical, and I knew that I wanted to hire people of my community and give them fair, equal wages,” said Acosta. “So as I’m building my business and investing in it, I’m also investing in the sustainability approach of it all. It goes hand in hand.”

Despite both of her parents being accountants, she says that in the beginning, she didn’t have a plan for savings, let alone retirement. “I look back at that person now, and I was like, how could she not have saved money? She didn’t have any sort of capital to start her business, but I made it happen,” said Acosta, adding that it is never too late to start. Today she is considering taking on investors, expanding her business, which has grown exponentially in the last two years, and even hiring more staff.

Finding the ingredients for financial success

For Fire Rugs founder Ari Genesis, employees having equity in the business is all a part of the plan. “I have a set amount of employees. Every rug that they make, they get a portion of the profits and that’s about half. So, there is a lot of overhead, said Genesis.

Even though profit margins are narrow, the business has come a long way. Early on he spent his last dollar in order to buy supplies for his business. On a routine shopping trip for supplies at an affordable retailer, he realized that he couldn’t even afford to buy socks. He spent his last dollar on wood for the loom, some cloth, and rug guns. From there, Genesis started making his custom rugs, thirty customs to be exact, one per day, in order to get money back on his investment. The strategy over time has paid off, and this past year Fire Rugs cracked six figures in total revenue earned. “I’m expecting next year we will hopefully double that,” said Genesis.

When it comes to other young entrepreneurs starting their own businesses, he says the key to growth is to “look at what other people are doing that’s successful and make your own spinoff that, with your own personality and your own spice to it, because it will be completely different.” Adding that showing people what you’re passionate about, they’ll see that you care and they’ll want to watch you. Genesis says this is what will get customers to buy into your business.

According to a recent study by Nielsen, 54% of Gen Zers plan on pursuing entrepreneurship. Gen Zers surveyed indicated control was a leading factor in pursuing entrepreneurship, along with the possibility of being debt-free and leading a purposeful life. Echoing Genesis’ inspiration and advice, this desire to launch a business comes from wanting to feel that their contributions matter, add flexibility, and build in a more digital-first world where customers can be reached beyond a brick-and-mortar store.

Rather than waiting until the later stages of a more traditional career or retirement for the opportunity to follow their passion, they’re making the jump early. This new push for independence isn’t without structure, however. More than ever, Gen Zers are not only opting to follow a less traditional path, they’re setting their sights on early retirement by way of this alternative career track.