Gen Z has ambitious retirement goals in face of increasing obstacles, Schwab says
A new study shows Gen Z workers are itching to retire at age 61. If that’s the case, they have a lot of hurdles to clear.
According to Charles Schwab’s annual nationwide survey of 401(k) plan participants released Thursday, Gen Z employees, or those who are 21 to 26 years old, want to retire at age 61, but 99% say they are facing obstacles to saving for a comfortable retirement, a 9% jump over last year and higher relative to the 88% of millennials, 91% of Gen Xers and 86% of boomers who cited such concerns.
The top obstacles to meeting their retirement goals for Gen Z are inflation (54%), meeting monthly expenses (35%), and paying for unexpected expenses (31%). Gen Z is also the generation that’s most likely to say financial stress has impacted their ability to do their job, at 26%, followed closely by millennials (22%), while Gen X (15%) and boomers (10%) report a much lower impact.
The online survey of 1,000 U.S. 401(k) plan participants was conducted by Logica Research between April 19 and May 2. The survey respondents worked for companies with at least 25 employees, participated in the 401(k) plan and were 21 to 70 years old.
“Just a few years ago, Gen Z’s were all about F.I.R.E., or Financial Independence Retire Early. now given higher inflation and other issues like student loans, they don’t feel they have the resources to save for retirement,” said Scott Bishop, managing director at Presidio Wealth Partners.
Bishop added that 401(k) plans allow workers to save pre-tax, while Roth options offer tax-free income in retirement.
“They are a great way with forced savings to get you toward a retirement at some point, and many employers help with matching contributions if you participate,” he said.
Elsewhere, the
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