Nearly Half of Gen Zers Withdraw from Retirement
Almost half of younger workers in a recent study admit they’ve withdrawn from their retirement accounts to pay down urgent needs.
The first portion of Payroll Integrations’ Employee Financial Wellness Report, a two-part study, finds that 46% of Gen Zers say they’ve taken money out of their retirement savings, while 31% of Millennials have dipped into their accounts. Thirty-eight percent of all employees surveyed also report tapping from their retirement funds at some point, the study finds.
Gen Zers were the top age group to withdraw funds to cover unexpected costs like car and home repairs (37%), while many have paid off debt with the savings (42%). By comparison, only 6% of Millennials, 17% of Gen X, and 0% of Baby Boomers have cited debt repayment as their reason for withdrawing.
“It’s clear that many Americans are feeling the pinch of economic circumstances, and those pressures are fundamentally reshaping their retirement planning strategies,” said Doug Sabella, CEO of Payroll Integrations. “Many employees say they don’t feel prepared to retire on their own terms within their expected timeline, which is a strong signal to companies to increase support for employees, whether through enhanced retirement plan offerings or expanded financial education.”
Respondents don’t see their withdrawals as a one-time emergency either. Instead, one in three expect to withdraw in the next 12 months, with 32% who plan to take out additional savings in the next year to pay for emergencies, while 18% will do so to afford daily costs.
Over one-third (37%) of Gen Zers report contributing 5% or less of their salary, while just 20% of Gen Xers contribute between that amount. At the same time, only 9% of Millennials and 6% of Boomers contribute at that level. Over half of employees in the survey say they allocate between 6% to 15% of their salary to retirement savings.
While past reports observe an improvement from the youngest working age group in the last 12 months, studies also touch on the financial struggles that Gen Zers face. A report from Bank of America in July noted that 51% of Gen Zers list high costs of living as a financial barrier, and 35% say they’re spending more than they initially would for everyday expenses like groceries (63%), rent and utilities (47%), and dining out (42%).
A lack of retirement confidence
As participants withdraw from their accounts, many also voice insecurities in retiring at a comfortable pace. Over half (59%) are not assured in their ability to retire on time due to rising daily costs (36%), the effects of market volatility on savings (30%), and waiting longer to save (36%). Close to half of Gen Zers (47%) and Millennials (46%) say they wish they started saving earlier.
Among all generations, Millennials showed the most confidence and restrain in withdrawing from retirement, with 47% who are sure they’ll retire at a comfortable pace and 31% who say they’ve taken money out of their retirement accounts.
Payroll Integrations’ 2025 Employee Financial Wellness Report was collected in Q3 2025 and includes responses from 250 full-time adult employees and human resource (HR) leaders.
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.
