Even though challenges remain, new research finds a hint of optimism going into the new year, when Americans were asked what steps they are likely to take in 2024 as to their overall savings and financial picture.
In fact, findings from Voya’s Q4 Retirement Report based on the firm’s Financial Consumer Insights & Research survey reveal that 72% of Americans are “extremely likely” or “likely” to save for retirement in 2024—which is up from 68% who said the same in October 2022.
And while nearly three-quarters of Americans say they plan to save for retirement in 2024, Millennials (95%) are significantly more likely than Baby Boomers (67%) to find continuing to make contributions to their retirement plan extremely important or important.
In this wave of research, Voya aimed to understand current personal financial sentiment of Americans and the likelihood of taking financial actions in 2024—specifically through a generational view. It found that, despite overall negative sentiment, most Americans are dedicated to staying the course, make contributions to their retirement plans, and keep a long-term view on their investments.
To that end, only 28% of employed Americans indicate that they are extremely likely or likely to take a loan or withdrawal from their employer-sponsored retirement plan in 2024. Notably, while this overall level still seems high, it is down from 45% who said the same in Oct. 2022.
In addition, 71% of Americans are extremely likely or likely to save more toward an emergency fund in 2024.
When it comes to their holistic savings opportunities, Gen Z (60%) and Millennials (53%) are also significantly more likely than Gen X (35%) and Baby Boomers (21%) to contribute more to their health savings and spending accounts in 2024.
Debt Burdens
That said, although saving for retirement remains top of mind, many Americans are also likely to continue struggling with debt. In this case, the survey found that Millennials (56%) and Gen Z (52%) are more likely than all Americans (41%), Gen X (42%) and Baby Boomers (23%) to carry a credit card balance from month to month.
Consequently, Gen Z (67%) is significantly less likely to find staying the course during a volatile market environment important vs. all other generations, including Millennials (82%), Gen X (84%) and Baby Boomers (88%)—indicating that competing financial priorities may take priority when it comes to divvying up their paycheck and finding ways to save.
Voya notes that this comes as little surprise as Gen Z has reported the highest levels of negative sentiment (unsure, nervous, frustrated) since April 2020 when asked how the economic environment makes them feel about their finances, with 86% reporting this sentiment in October 2023.
Help Wanted
As such, younger generations want help and are seeking support from their employer. In this case, the survey found that Gen Z (69%) and Millennials (65%) are significantly more likely than Gen X (48%) and Baby Boomers (34%) to use digital tools to help them understand their overall spending and savings picture in 2024.
What’s more, among employed Americans, Millennials (67%) are significantly more likely than Gen X (49%) and Baby Boomers (34%) to utilize workplace advice services to better understand their overall savings picture in 2024.
“Given the current uncertain economic environment as we head into 2024, Millennials and Gen Z are eager to find more opportunities on how to best optimize their overall financial wellbeing,” said Kerry Sette, Vice President and Head of Consumer Insights and Research at Voya Financial. “They also believe that the employer plays a critical role in their emotional, financial and physical wellbeing. With younger generations open to support in the workplace on how to optimize their savings and workplace benefits, now provides an opportune time for employers to help.”
Sette adds that Gen Z and Millennials are also the most likely to want to receive information outside of open enrollment (i.e., all year long) to better understand their workplace benefits. “Offering more integrated benefits for the employee overall coupled with an effective communication strategy is a way to help support them that can be influential throughout the year,” she further emphasizes.
The findings are based on Voya’s Financial Consumer Insights & Research survey conducted Oct. 2-3, 2023, among 1,005 adults, including 467 Americans working full-time or part-time.
