Young Americans Think the System's Stacked Against Them: A Retirement Account Can Prove It Still Works
Twentysomethings are increasingly skeptical about homeownership and investing. But a retirement account (and the magic of compounding) could change their minds.
Something interesting is happening among young Americans: Even young conservatives are becoming more skeptical of capitalism.
A Wall Street Journal opinion piece (paywall) recently cited a survey showing that 53% of conservatives under 40 support government-run grocery stores. Harvard's Fall 2025 Youth Poll found that just 39% of young Americans support capitalism, down from 45% in 2020, with only 19% describing themselves as capitalists.
Those numbers are striking. However, I don't think the explanation is as simple as young Americans suddenly embracing socialism. I think they're frustrated, and a lot of that frustration is justified.
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Housing is expensive, education and healthcare costs have risen. People who already own homes and stocks have benefited enormously from rising asset prices, while those trying to enter the market are paying significantly more to do so.
A 25-year-old looking at that landscape has every reason to ask whether the system is working for them.
But there's another part of the equation that I think gets overlooked.
I've spent more than 25 years as a tax attorney focused on retirement accounts and wealth creation. One of the hardest things about convincing someone in their twenties to care about retirement is that the reward feels impossibly far away.
You put $7,500 into an IRA at 25. A year later, maybe it's worth $8,500. That's not exactly life-changing money.
The mistake is evaluating that decision at 26 instead of 65.
Capitalism has a similar problem. Its benefits often take time, and we increasingly live in a culture that expects results immediately.
Starting out has never been easy — but it's different today
When I started practicing law in New York in 2001, I made about $125,000 a year. That was a very good salary for a 25-year-old.
I still had a roommate.
I didn't buy my first house until I was 37. Of course I would have liked to own one sooner. But at the time, I didn't interpret not owning a home in my twenties as evidence that the economic system had failed me. I was building my career, saving money and starting a business. I assumed the payoff would take time.
There is an important difference today.
Young Americans aren't imagining the affordability problem. Housing costs are real, and rising asset prices have disproportionately benefited people who already own stocks and real estate. Someone starting from zero today can reasonably look at the cost of a home and wonder whether patience alone is enough.
We shouldn't dismiss that concern, but we also shouldn't make the opposite mistake and conclude that because the path has become harder, the principles behind building wealth no longer work.
Social media shows the finish line
When I was 25, I wasn't carrying around a device that showed me hundreds of wealthy people every day.
Today, someone can open TikTok and immediately see a 27-year-old entrepreneur stepping onto a private jet, an investor talking about making millions in crypto or an influencer showing off a house that most people historically wouldn't expect to own until much later in life.
What you don't see is the race.
You don't see the 10 years of work, the failed businesses, the bad investments or, in some cases, the family money behind the lifestyle.
At the same time, sports betting and speculative investing have made the idea of getting rich quickly feel more attainable. Pew Research found that 31% of Americans ages 18 to 29 bet on sports in the past year, compared with 22% of adults overall. A 2026 Urban Institute study found that 15% of young bettors saved less because of it.
My concern isn't that placing an occasional bet is going to destroy capitalism.
It's the mindset.
Real wealth creation is usually boring: Work. Save. Buy assets. Reinvest. Avoid major mistakes. Repeat.
The real divide is ownership
This is where I think young Americans are identifying a real problem but sometimes drawing the wrong conclusion from it. Capitalism rewards owners.
If you own a home and its value increases, you benefit. If you own stock in a growing company, you benefit. If you own a business, you participate in the value that business creates.
If you own nothing, you are primarily dependent on your labor, and that divide matters.
But if the problem is that too few people participate in ownership, the answer isn't to reject ownership. It's to help more people become owners earlier.
Retirement accounts are one of the simplest ways to do that.
Imagine someone invests $7,500 annually from age 25 to 65 and earns an average 8% return. That account could grow to roughly $1.9 million, even though only about $300,000 came directly from the investor's contributions.
That's what time does.
A person investing $10,000 annually at 8% would have roughly $145,000 after 10 years, $1.2 million after 30 and $2.6 million after 40.
The investor didn't suddenly become smarter in year 30.
Their capital had time to work.
Young Americans are right to want more
None of this means telling a 25-year-old struggling with rent, student loans or healthcare costs to stop complaining and wait 40 years.
That's not a serious response.
If we want younger Americans to believe in capitalism, they need a realistic opportunity to participate in it. That means making it easier to save for retirement, improving financial education, expanding access to investment and creating more pathways into home and business ownership.
It also means recognizing something uncomfortable: Previous generations benefited from economic conditions that aren't identical to those facing young people today.
But acknowledging that doesn't require abandoning the basic principles of long-term wealth creation. In fact, I would argue the opposite.
If rising asset prices have widened the gap between owners and non-owners, becoming an owner matters more, not less. Young Americans have access to investment tools my generation could barely imagine at their age. You can open an IRA in minutes, buy fractional shares and invest with virtually no commissions.
What young people have most of all is something nobody can buy later: Time.
Capitalism isn't perfect. It doesn't guarantee success, and legitimate structural problems deserve legitimate solutions.
But neither capitalism nor retirement investing should be judged solely by what they produce in a year or two.
At 25, you're not supposed to have already built wealth. You're building the foundation for it.
The question shouldn't be whether young Americans are patient enough to accept an economy they believe isn't working for them. It should be how we help more of them become owners.
Our retirement system may be the best tool we have to do that. A 401(k), IRA or Roth IRA gives almost every working American a tax-advantaged way to own stocks, businesses, real estate and other assets. And young Americans have the greatest advantage of all: Time.
At 25, they have four decades for ownership and compounding to work in their favor. If the economic divide is increasingly between those who own appreciating assets and those who don't, the answer isn't to abandon ownership.
It's to create more owners, and give them enough time for ownership to matter.
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