Gen Z Entering Workforce Eager to Save in a 401(k) Plan
East Granby, CT - September 5, 2017 – East Granby, CT – Members of Generation Z, ages 16-23, are eager to earn money and save even though some have yet to begin their careers.
A June 2017 survey of 2,000 members of Generation Z conducted by EACH Enterprise, Generation Z on a Track Toward Retirement Success, found that these older teens and young adults are receptive to retirement plan communication and education efforts and have great potential to be financially prepared for retirement by age 70.
- On average, Gen Z members believe they should save 28% of their income for future use.
- Almost half have heard of 401(k)’s through family, friends, and the media, and are eager to learn more.
- 83% say it is important to save, and 76% want to be better financially educated.
- 50% agree it is the right thing to do to save for retirement in a 401(k) when they have a job, and 12% of 22-23-year-olds are already enrolled in a retirement savings plan.
Results of this study bode well for the retirement plans business. They also question standard industry practices. We have created obstacles to the retirement success of workforce entrants. We must question the way we design retirement plans and communicate to meet the needs of an eager generation:
- Immediate eligibility will allow this group to save right away as they expect to;
- Eliminating or lowering entry age requirements will allow this new generation to take greater advantage of the time value of money;
- Auto enrollment of newly-eligible employees at a default contribution rate of 15+% that many deem necessary;
- Communicate that saving only 20% to 25% of pay toward retirement may be adequate;
- Leverage social media to communicate with savers on Wi-Fi connected mobile handheld devices.
Executive summary posted HERE
Purchase the full report HERE
Gen Z Retires is a multi-year co-sponsored initiative with a goal of setting Generation Z, currently 23 years and younger, on a course to achieve retirement success by age 70. It involves a comprehensive range of marketing activities designed to place and maintain Generation Z on a course to achieve retirement success. The strategic initiative goes beyond financial literacy, tapping into the behaviors, preferences and hot buttons of this cohort, including their needs, wants and dreams, always with an eye towards leading them to make responsible financial decisions. Your involvement demonstrates your long-term commitment to the retirement success of working Americans. The initiative is collectively staffed and managed by EACH Enterprise.
Learn more about GenZRetires at www.genzretires.com
About EACH Enterprise
EACH Enterprise, LLC is dedicated to the institutional retirement plans market, serving investment management firms, recordkeeping service providers, and advisory firms. EACH Enterprise is a proven leader in providing PR based marketing solutions to organizations in the retirement plan industry. Since 2007, EACH Enterprise has been organizing roundtables and studies to support participant strategy in the retirement plans sector. EACH Enterprise is esteemed for its thought leadership and collaborative approach to solving industry problems. EACH Enterprise does not provide investment, legal, or tax advice, nor does it function as a retirement plan advisor.
Learn more about EACH Enterprise at www.EACHEnterprise.com