Empower Retirement is out with new research on digital-savvy, COVID-scarred Gen Z, and at least with retirement saving, they beat all others, even baby boomers.
“Gen Zers head into 2022 with the highest percentage of the generations participating in Empower Retirement workplace savings plans, even baby boomers, who are leaving the workforce by the millions each year,” the Denver-based firm reports.
More specifically:
- 86.8% of eligible GenZers are enrolled in Empower workplace retirement plans compared to Baby boomers at 83.9% enrollment rate.
- Their savings rate, on average, is 6%, which is lower than the other generations, with Baby Boomers’ savings rate being the highest at 10.7%.
- 8.6% of Empower enrolled Gen Zers contribute to Roth 401k—nearly the same rate as millennials.
But they want to save more.
In a separate Empower/Harris Poll survey, 49% of Gen Zers said they are not saving enough because they must make ends meet and are not as engaged in their retirement savings process as other generations. Yet 76% of Gen Zer surveyed said they are comfortable getting help.
Engaged participants
Engaged participants have dramatically higher savings rates than those not engaged at 9.2% vs. 5.7%.
When they are engaged, they feel more confident that they are saving enough. They rate themselves higher regarding financial knowledge, and they feel more comfortable making investment decisions.
Empower concludes that Gen Zers are just getting started, and they’re likely to face a host of financial decisions and challenges that could detract from their retirement goals. It’s critical to deliver a steady cadence of relevant education and guidance that helps them make informed financial decisions along the way and find a balance between their financial needs without shortchanging their retirement savings.
The good news is that Gen Zers want to save more, and they are interested in getting help. With 76% of surveyed Gen Zers saying they are comfortable getting help, there’s an excellent opportunity to engage them with online or one-on-one advice.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
