Against a backdrop of outstanding student loans and rising consumer debt, only about half of young adults believe they will be able to retire at the age they want, according to the findings in a new survey.
Conducted by Georgetown University, in partnership with Bank of America, the Young Adults and Workplace Wellness Survey examines the attitudes and priorities of more than 1,000 working-age Gen Z and younger Millennials (ages 24-35). It found that 44% of young adults indicate that they have outstanding student loans or consumer debt, and 49% of those with outstanding debt say that paying off the debt is a greater priority than saving for retirement.
Consequently, given the percentage of young adults prioritizing debt repayment over saving for retirement, it may come as no surprise that only 52% of young adults are “confident” in being able to retire at the age they want. Moreover, 68% of young adults indicate they would like to retire before age 65, yet fewer than half (44%) expect that will be possible.
What’s more, whether it’s due to their lack of confidence in being able to afford to retire or because of their attitudes about work and purpose, many young adults plan to continue working in retirement rather than stopping work altogether. Only 4 in 10 young adults (40%) plan to fully stop working at their expected retirement before age 65, while fewer than 3 in 10 (28%) plan to fully stop working at their expected retirement after age 65.
And while most young adults (86%) expect to rely wholly or in part on their retirement savings as their main source of income in retirement, they also cite various other sources. Six in 10 (60%) expect to continue working full time to help fund their retirement, while 63% expect to work part time (however, those who expect to work part time are less likely to rely on working income as a major source of their income in retirement), the findings show.
Work-Life Balance and Benefit Preferences
Meanwhile, the survey also reveals that a flexible work schedule and a greater work-life balance are critical for young adults.
To that end, the percentage of young adults who rate their workplace wellness programs as “good” or “very good” is highest among those who indicate the availability of flexible work schedules. Yet, only about one in four young adults (24%) strongly agree that their employer has policies or structures in place to support work-life balance.
Young adults’ ties to their work are also not strong. Two in three young adults (68%) view their work mainly as a way to make a living but not as a major part of their identity or personal fulfillment. More than half (54%) indicate they plan to switch to another field or career, and 46% say they “definitely” or “probably” will look to change jobs/fields in the next year.
Paid time off (PTO), health insurance, a flexible work schedule and retirement savings plans are the top four benefits, in that order, cited by young adults overall as impacting their choice of an employer. However, among young adults planning to change jobs in the next year, PTO and flexible work schedules weigh most heavily in their choice of an employer (65% and 58%, respectively).
And while mental health and tuition support benefits fall further down the list of benefits that impact their choice, they weigh more heavily in young adults looking to change jobs (29% and 26%, respectively) than for young adults who are planning to remain with their employer (18% each).
What’s more, given their high rates of uncertainty in their career or field and high likelihood of changing jobs, it may come as no surprise that nearly three-quarters (73%) of young adults across the board (and 82% of young adults who plan to switch jobs in the next 12 months) say they’d prefer to receive benefits that aren’t tied to their employer but which they can take with them when they change jobs.
More concerning is that more than half (51%) of young adults believe they can purchase benefits in the open market that are as good—both in terms of quality and value—as those offered by their employer, which suggests a lack of understanding of the price and delivery efficiency of benefits offered on a group basis.
“In the post-pandemic era for the workplace—with people returning to the office, hybrid work environments, and desires for greater work-life balance—employers need to adapt quickly,” says Kevin Crain, Head of Retirement Research & Insights at Bank of America. “To be an 'employer of choice' to attract and retain young adult workers, employers need to take greater responsibility for their employees' overall wellness by offering new benefits and encouraging utilization of existing benefits.”
The survey was fielded from Jan. 30–Feb. 10, 2023, among 1,032 full-time employed respondents, ages 24 to 35, across all genders, geographies, education and income levels. The survey follows two focus groups held Dec. 12–13, 2022, with full-time employed young adults ages 24 to 35. One focus group was held with employees of companies with fewer than 100 employees and one group with employees of companies with 100+ employees.
