TIAA’s CEO made $26,000 in her first job but still maxed out her 401(k). She has advice for Gen Z

TIAA CEO Thasunda Brown Duckett tells Gen Z to “max out” their 401(k)s before they get paid: “Because once you get it, you will find ways to spend it.”

For young workers watching their salaries get eaten up by rent, groceries, and student loans, setting aside money for retirement can fall to the bottom of their list. But making little sacrifices over time is one of the best paths to ride out post-career days in comfort, according to TIAA President and CEO Thasunda Brown Duckett. Even when the retirement services leader was broke in her 20’s, she still found a way to invest in her future. 

Right after graduating from the University of Houston in 1996, Duckett landed her first job at Fannie Mae: a government-backed mortgage finance company. And just like other Gen Zers working their way up from the bottom of the totem pole, money was tight. 

“I made $26,000 when I graduated from college—that was $26,000 more than I made ever—and so I immediately maxed out on my 401(k) plan,” Duckett revealed during Fortune’s Titans and Disruptors of Industry podcast with Editor-in-Chief Alyson Shontell. 

She’s been topping up her 401(k) ever since, from Fannie Mae’s to her ascension as Chase’s CEO of Consumer Banking in 2016, and her current 5-year run at TIAA. Now she’s a multimillionaire and two-time chief executive, one of just 11 Black CEOs leading Fortune 500 companies. And she hopes Gen Z will start adding to their 401(k)s sooner rather than later.

“Especially for young people, retirement seems so far away, but there’s a hack,” Duckett added. “The hack is: first job, first dollar.”

“The first thing I tell young people is, your very first job, max out before you get the check, because once you get it, you will find ways to spend it,” the CEO continued, emphasizing the “Power of compounding: $1 today is worth more than $1 tomorrow…You want to make sure you take full advantage of that match.”

Duckett’s advice for Gen Z: start investing and stay optimistic

After pensions fell out of favor among many employers, the 401(k) has become the default retirement plan for many workers. And there are real financial incentives behind the savings pot. 

Nearly all employers offering 401(k)s match contributions, usually up to 6%; it can also save professionals hundreds to thousands of dollars in taxes each year. Over time, the small piece taken out of paychecks snowballs into a sizable nest egg.

Duckett also advises young workers that after setting aside enough for retirement and necessary expenses, they should use whatever financial runway they have left to invest in other assets. Putting money towards a Roth IRA, stocks, and high-yield savings accounts are other popular ways young workers can grow their wealth. 

“Retirement tax policy is very favorable to making those dollars work harder for you longer,” the CEO said on the Titans and Disruptors of Industry podcast. 

“For young people, max out understanding that you have to save to invest…Max out on your retirement, have your rainy day fund to make sure that you can afford the flat tire and all the basic things that life will give you,” she continued. “Then you can start investing.”

Over time, she said, investing just becomes a “muscle habit.” And while saving enough for a cushy retirement can feel like a pipe dream for workers in their 20’s, the TIAA CEO is optimistic that there’s no better time to take control of the future. 

“I just want to remind this next generation, if you go back 250 years and you look at where we [America] are today, there is no better day that I want to be in than today,” Duckett said. “The future is always brighter because we get to decide.”

A learning lesson with her father on the importance of retirement 

For the TIAA CEO, retirement readiness isn’t just central to her role at the company handling post-career savings, investments, and insurance for millions of workers. It’s also a part of her backstory.

When Duckett landed that first job, her family was up against a financial challenge of their own. 

Duckett had just returned home from graduating college when she had a look at her father’s financial statements, and there was a glaring concern. Her dad—Otis Brown, a blue-collar worker who worked at a warehouse and drove trucks—wouldn’t receive enough from his pension to comfortably live out retirement. He had access to a 401(k) through his employer, but the account sat empty. 

“We definitely had financial insecurity growing up,” Duckett explained. “I’m like, ‘Dad, this is not enough money for retirement’…He never contributed $1. That’s 30-plus years of compounding that never got compounded.”

Even though her dad lost out on decades of savings, it wasn’t too late to get in on the benefits. After that conversation, Duckett’s father took the maximum contribution with his 401(k) plan, despite money being tight. 

“Fast forward, he got to see the benefit of it, Duckett said. “But he also felt bad that he could have changed the course of his life if he would have been able to know that that benefit was for him, too.”

This story was originally featured on Fortune.com