The 401(k) took a hit in popularity among younger workers, defined as those who graduated from college in the last 24 months or will graduate in the next 12 months.
DC plans ranked fifth of eight, sandwiched between working remotely and tuition reimbursement, according to the American Institute of CPAs (AICPA).
“When asked to choose the top three benefits that would most help them achieve their financial goals, young adult job seekers top two choices focused on the traditional benefits of health insurance and paid time off,” the organization notes.
Interestingly, student loan forgiveness was the third most cited option.
“This goes to show employers that along with health and work-life balance, student loans are a primary concern for young adults entering the workforce,” AICPA argues.
It adds that the priority placed on paying off student loans may lead some new graduates to pursue careers in public service where student loan forgiveness is a more common incentive.
Young adult job seekers
- Health Insurance – 54%
- Paid Time Off – 45%
- Student Loan Forgiveness – 41%
- Working Remotely – 38%
- 401k Retirement Fund Match – 36%
- Tuition Reimbursement – 25%
- Pension – 15%
- Paid Parental Leave – 13%
“The relatively low number (36%) that selected 401k match may be explained by retirement seeming like it is in the distant future. However, individuals with the longest time until retirement stand to gain the most from this benefit. Those just entering the workforce should aim to contribute enough to get the entire employer match. Otherwise, they are essentially missing out on a 100 percent return on their investment that will continue to compound over time.”
While student loan forgiveness was the third most popular benefit overall for young Millennials—among those with outstanding loan debt, student loan repayment was viewed as being a more important use of their benefit dollars than any other comparable benefit.
Young adult job seekers with student loans
When given a hypothetical $100 to have an employer split between paying a portion of their student loan debt versus putting towards a specific benefit, young job seekers burdened by student loan debt said they would prefer their employer put more money towards paying their student loan debt in all cases.
| Benefit | Dollars Towards Benefit | Dollars Towards
Student Loan Debt |
| Health Insurance | $ 39 | $ 61 |
| Paid Time Off | $ 39 | $ 61 |
| Tuition Reimbursement | $ 39 | $ 61 |
| Life Insurance | $ 37 | $ 63 |
| 401(k) Retirement Fund Match | $ 35 | $ 65 |
| Day Care | $ 21 | $ 79 |
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.
