Gen Z, Millennials to Seek Employer Support for Retirement Savings in 2024

While Generation Z and Millennial employees are more likely to struggle with debt than older generations, saving for retirement still ranks as a top priority heading into 2024, according to a new Voya Financial consumer survey.

Across all generations, 72% of Americans said they are extremely likely or likely to save for retirement in 2024, up from 68% in October 2022, Voya found. Millennials, in particular, were significantly more likely than Baby Boomers to find it extremely important to continue to make contributions to their retirement plan. Of course, some Baby Boomers, born from 1946 through 1964, may already be retired or about to retire.

When it comes to holistic savings opportunities, Millennials and Gen Zers were also more likely than Gen X and Baby Boomers to contribute more to their health savings accounts in 2024, Voya found.

Meanwhile, paying off debt remains a glaring problem for Millennials and Gen Zers, as these two generations are more likely than all other generations to carry a credit card balance from month to month.

Separate research from Corebridge Financial found that 75% of 2,100 federal student loan borrowers anticipated that the October resumption of student loan payments would negatively impact their ability to save for retirement. Specifically, 22% said they planned to reduce how much they save for retirement, and 29% said they planned to reduce their emergency savings.

A recent Charles Schwab study also found that retirement obstacles such as inflation, keeping up with regular expenses, unexpected expenses and helping aging parents financially are some of the main factors impacting Gen Z workers’ savings.

In addition, among all Americans, Gen Z (67%) is significantly less likely than all other generations to find it important to stay the course during a volatile market environment, according to Voya.

Kerry Sette, vice president and head of consumer insights and research at Voya, says via email that those in Gen Z are starting to become financially independent and have only recently entered the workforce. Therefore, they are making less money than the other generational cohorts and are the newest to be managing their finances.

“So, while they may find staying the course during a volatile market less important currently, our research has found that they are more likely to cut their discretionary spending and are eager to find more opportunities on how to best optimize their overall financial wellbeing and supplement their income,” Sette says. “Our research shows that there certainly is room for priorities to change as this newest cohort of the workforce continues to grow and evolve.”

The Gen Z cohort was born from 1997 through 2012.

Respondents from younger generations also said that seeking support from their employer is critical to their retirement savings. Voya found that 69% of Gen Zers and 65% of Millennials—as opposed to 48% of Gen Xers and 34% of Baby Boomers—were likely to use digital tools to help them understand their overall spending and savings picture in 2024.

In addition, among employed Americans, Millennials were significantly more likely than other generations to use workplace financial advice services, including managed accounts, to better understand their overall savings picture in 2024.

Sette says that with younger generations eager to receive support in the workplace to optimize their savings and workplace benefits, now is an opportune time for employers to help.

“Offering more integrated benefits coupled with an effective communication strategy can provide a great opportunity for continued support for younger employees,” Sette says. “While the Millennial and Gen Z generations still have years for catch-up savings for retirement, our research underscores that the realities of having to prioritize spending for today make saving for longer-term savings goals like retirement a formidable challenge.”

As a result, Sette says more employers today are offering holistic financial wellness solutions to support their employee base, including HSAs to offset the burden of medical costs, student loan debt support and tools to build emergency savings.

Voya’s survey was conducted on October 2 and October 3 and included responses from 1,005 adults aged at least 18, featuring 467 Americans working full- or part-time.