Advice on 401(k) and IRA young investors can’t afford to ignore

Jean Chatzky didn’t sugarcoat it. She rarely does. When the longtime financial journalist and CEO of HerMoney sent a sharp message about retirement savings into the social feed vortex, it landed hard—especially with the under-40 crowd.

Her message was simple: “Your 401(k) isn’t a gift. It’s your responsibility.”

This wasn’t motivational fluff. It wasn’t another “you need to invest!” meme. It was a cold fact framed with urgency. And it hit different. Not just because Chatzky has credibility, but because the system has changed—and young investors can feel it in their bones. There’s no pension. There’s no bailout. And frankly, there’s no patience for vague financial advice anymore.

This article breaks down what Chatzky really meant, why the 401(k) and IRA conversation is more relevant than ever, and what kind of contribution strategy actually works when you’re balancing rent, loans, and life.

Let’s zoom out. If you’re under 40, there’s a good chance you never expected to get a pension. That ship sailed decades ago. But here’s what you might not fully realize: your 401(k) and IRA aren’t just substitutes. They’re transfer-of-risk mechanisms—from company to worker.

In short? You’re the plan manager now.

That means every choice, from how much you contribute to what funds you pick, adds up to one thing: whether Future You can afford not to work.

If you’re gigging, freelancing, or juggling part-time contracts, it’s even tougher. There’s no default retirement plan waiting for you. You have to build the plan and fund the plan. That’s the part Chatzky wants younger workers to really hear—because too many are confusing account access with strategy. You can open an IRA in 10 minutes. The hard part is keeping it alive when life gets expensive.

There’s this narrative that younger generations just don’t have access to retirement tools. But that’s not the full story. Access isn’t the barrier—it’s activation. Most full-time jobs offer a 401(k). Most workers under 40 have at least heard of IRAs and Roth IRAs. But knowing about something doesn’t mean you’re using it right.

Chatzky’s frustration is aimed at the mental trap that says, “I’ll contribute later when I earn more.” That delay costs more than people think. Start at 25 and contribute $200/month? You could retire with $400k–$600k depending on the market. Wait until 35 to start? You’ll need to contribute double that—just to land in the same place. And we haven’t even touched inflation yet.

Chatzky’s other point: opening a 401(k) is just the beginning. The real impact comes from what’s inside it.

Too many young investors are auto-enrolled in super conservative funds (read: stable value, low-yield stuff). Or worse, they don’t pick anything at all—and the plan defaults to cash equivalents. That’s a missed opportunity. Most 401(k)s include target-date funds that auto-adjust based on your age. These aren’t flashy, but they’re solid—especially if you’re not ready to handpick ETFs or slice and dice your allocation by sector.

IRAs give you even more control, especially Roth IRAs. You can invest in low-cost index funds, pick your risk level, and (unlike traditional 401(k)s) you can withdraw contributions if you need to without penalties. That’s flexibility plus growth potential. So yeah, setting it up is great. But building the right portfolio inside that shell? That’s where your future really gets funded.

This needs to be said again: if your job offers a 401(k) match and you’re not contributing enough to get the full match, you’re literally throwing away free money. Like, actual dollars. Imagine your employer offers a 100% match on the first 4% of your salary. If you make $50k a year, that’s $2,000 in free cash—every year—just for participating.

That’s not some trick. It’s a built-in bonus that only works if you show up. And way too many people don’t. Worried about cash flow? Start smaller. Even 2% is better than zero. Then auto-increase contributions by 1% each year or whenever you get a raise. Waiting until you can “afford more” often means you’ll never start.

Let’s talk Roth IRAs. These might be the most underrated wealth tools out there for anyone in their 20s or 30s.

Why? Because they let your money grow tax-free—and you don’t pay taxes when you take it out later. That’s a huge deal, especially if you expect to be in a higher tax bracket when you retire.

Plus, Roth IRAs give you more control than 401(k)s. You choose where the money goes. No weird plan restrictions. And as mentioned earlier, you can withdraw your contributions (not earnings) any time without penalties. That’s a built-in safety net that traditional plans don’t offer. Chatzky didn’t mention it by name, but the subtext of her warning is this: if your employer doesn’t offer a match, you still have tools. And the Roth IRA is one of the strongest.

If you’re still not sure why Chatzky’s message is so urgent, here’s the core reason: compound interest favors the young. Investing early isn’t just a nice idea. It’s the one financial hack that actually works—and it only works if you give it time.

Start at 25? Every dollar gets 40 years to grow.

Start at 35? That same dollar only gets 30 years.

The growth curve is exponential. That means the biggest gains happen at the end. So delaying your start by 5 or 10 years doesn’t just cost a little—it slashes the tail end of the curve where all the magic happens. Chatzky’s point: the clock is the real asset. Not your salary. Not your stock picks. Not your bonus check. Just time.

Let’s kill the idea that you need to max out your 401(k) or IRA for it to be “worth it.” That myth stops more people than it helps. The 401(k) limit for 2025 is $23,000. The Roth IRA limit is $7,000 if you’re under 50. That’s a lot.

And most people aren’t hitting those limits. That’s fine. Start with what you can do. Even $50 a week adds up. Even $25. The real win is building a contribution habit that sticks. Chatzky isn’t yelling at people to be perfect investors. She’s saying: stop treating retirement like a back-burner issue. Every skipped year is a future cost you won’t see until it’s too late.

One of the biggest mindset shifts in Gen Z investing is that retirement isn’t just about quitting at 65 and moving to Florida. It’s about flexibility. The ability to take a sabbatical. Walk away from a toxic job. Travel with your kid during school breaks. Switch careers at 40. Take care of a parent without losing your mind.

Your 401(k) or IRA might not fund all of that. But it anchors your long-term financial stability—which makes those choices possible. Chatzky’s wake-up call isn’t about becoming a millionaire. It’s about buying your freedom. That’s the real ROI of these accounts.

Let’s be real: most of Gen Z doesn’t trust the financial system. The 2008 crash, pandemic layoffs, wage stagnation, student debt—this generation has receipts.

That’s why so many are skeptical of “just invest in your 401(k)” advice. It sounds like it’s coming from a different planet. But Chatzky’s message hits different because it acknowledges that skepticism—and says, “Yes, the system’s broken. So you need to build your own.”

That’s not fair. But it’s real. Retirement accounts are just a tool. What you do with them is up to you. But ignoring them? That just gives the system more power to keep you stuck.

Here’s the hard truth most budgets don’t show: your future isn’t a bonus round. It’s part of the main game. So stop treating retirement savings like it’s optional or “for later.” Make it part of your monthly structure—just like rent, phone, and WiFi. If you need a number, start with 10% of your take-home pay. Can’t swing that? Start with 5%. Still tough? 1% is better than nothing.

Automate it. Forget it. Watch it grow. You don’t need to become a finance nerd. You don’t need to read Reddit threads for hours. You just need to make one small choice: fund your freedom now—before life gets in the way.

Jean Chatzky isn’t trying to scare you. She’s trying to shake you awake. Your 401(k) isn’t your boss’s gift. Your IRA isn’t a cute savings bonus. These are the scaffolding of a life you can control. So take the hint. Take the match. Take the small win. And start.

Because nobody else is coming.