Editor’s Note: This is part I of a two-part series.
It’s not unusual for older generations to look askance at their younger counterparts and dismiss them with a harumph at the thought that one day they will come to the fore. But some recent data suggests that in the case of the youngest demographic group in the workforce, that supposition is inaccurate—at least as far as retirement readiness is concerned. 
Generation Z is looking ahead and evinces a healthy regard and respect for their financial future, long-term. And that’s not just the view of one analysis—multiple studies and reports have found the same thing.
The members of Gen Z, argues the Assured Partners Blog in “Building Bridges, Not Gaps: Tailoring Employee Benefits to Diverse Generations,” not only have the youthful idealism commonly attributed to younger generations, they also are all about personalization. They suggest that Gen Z is interested in benefits that fit and support their individual lifestyle and reflect their values. And, they say, Gen Z is interested in wellness and assistance in meeting their financial goals.
Financial Literacy
A significant portion of Gen Z is interested in financial literacy. People Keep in its May 2022 survey of 305 employers and 925 employees in a wide range of industries indicates that more employees who hail from the youngest generations in the workforce know what they don’t know than those in older generations. More Gen Z members showed interest in financial literacy than did the members of any other demographic group, 30%; Millennials came in a close second at 28%.
Student Loans
The youngest generations in the workforce are the most interested in their employers helping them pay down their student loans, People Keep reports: 26% of Gen Z workers in their study, and 27% of Millennials are interested in such a benefit.
Steve Fussell, executive vice president for human resources at Abbott Laboratories, has put what that means in stark terms. Paying down student loan debt can delay saving for retirement, and for some can even mean putting nothing aside for retirement at all while focusing on paying back loans. Back in 2018, he remarked on CNBC that every decade that new college graduates wait to start saving for retirement doubles the amount they need to save.
Saving Behavior
Financial planning programs appeal to employees who are part of Gen Z, says Assured Partners. And the Investment Company Institute (ICI) reaches a similar conclusion, finding that Gen Z is more committed to saving for retirement than its counterparts were at similar ages.
ICI reports that in 2022, 34% of the Gen Z households they surveyed participated in a defined benefit plan, a defined contribution plan, or an IRA. By contrast, they say, when Gen X employees were of a comparable age, less than half as many—15%—did.
The difference is even more stark when considering DC plans—24% vs. 7%. And three times as many Gen Z employees were participating in either a DC plan or IRA as did Gen X employees when they were the same age.
That disparity holds regarding amounts saved as well. ICI notes that in 2022, the Federal Reserve Board said that median savings in a DC plan for households age 18-25 came to $5,000; for members of Gen X when they were that age, the median was $1,729. For households whose members were age 26-41 in 2022, the median saved in a DC plan was $26,000; for households whose members were those ages in 1989, that figure was $11,528.
And more good news—ICI found that rather than the stereotype that younger people are disillusioned with the retirement system in the United States, more than 75% said that the tax treatment of retirement plans is a major factor that encourages them to participate.
Employer-Provided Retirement Plans
Employer-provided retirement plans matter to young employees, say researchers.
People Keep says that retirement benefits are very or extremely important to 83% of members of Gen Z. And ICI’s results show why that matters—they found that 84% of the workers under age 35 whom they surveyed said that the employer-provided retirement plan in which they participate helps them think about more than just short—term needs and consider planning for the future.
ICI further reports that more than 50% of those younger than age 35 who participate in a DC plan would not be, absent an employer-provided plan.
Next: Action Steps an Employer Can Take Support Gen Z in Saving
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