Confident about their careers and in their ability to achieve financial security, the nation’s youngest adults have a goal of retiring before they reach age 60, but that confidence comes with a few caveats, according to a new study.
Data from Northwestern Mutual's 2022 Planning & Progress Study reveals that Americans between the ages of 18 and 25—known as Gen Z—are taking significant steps to improve their financial wellbeing with the goal of retiring at age 59, years ahead of the generations that preceded them. They also were the most likely to build savings during the pandemic and begin working with an advisor.
Instinct to Plan
According to the firm’s study, Gen Z—more than any other generation—improved their financial habits during the pandemic. It found that 7 in 10 (70%) adults from the age group reported higher savings over that period. They were also more likely to seek professional financial help, with nearly 3 in 10 (29%) saying they did not have an advisor before the pandemic but have either started working with one or plan to move forward. Despite that, close to 75% of Gen Z adults said their financial planning needs improvement.
|
All U.S. |
Gen Z |
Millennials |
Gen X |
Boomers+ |
|
|
I have been able to build |
60% |
70% |
61% |
50% |
62% |
|
I didn't have an advisor |
18% |
29% |
24% |
21% |
7% |
|
My financial planning |
62% |
74% |
74% |
69% |
41% |
Gen Z also had the highest levels of confidence in their careers and in their ability to achieve financial security. The research showed that they plan to retire younger than any other generation—and a full 12 years earlier than Boomers+.
|
All U.S. |
Gen Z |
Millennials |
Gen X |
Boomers+ |
|
|
I have had / will have a |
72% |
79% |
74% |
64% |
75% |
|
I have achieved / will achieve |
66% |
70% |
66% |
58% |
70% |
|
Social Security will be there |
56% |
55% |
52% |
43% |
70% |
|
I expect to retire at age |
64 |
59 |
61 |
65 |
71 |
Yet, while Gen Z is looking forward to an early retirement, money is not what drives most of them at work. Nearly two-thirds (64%) said personal fulfillment is more important in a career than money (36%).
But contentment is elusive, and Gen Z’s assessment of their own mental health stands out as considerably more fragile than all other age groups. To that end, the study found that 44% of Gen Z reported their mental health as weak or very weak compared to only 26% for all U.S. adults.
The study was conducted by The Harris Poll on behalf of Northwestern Mutual and included 2,381 American adults aged 18 and older, with oversamples of Gen Z, who participated in an online survey between Feb. 8–17, 2022. Last year’s study included 2,320 American adults aged 18 or older who participated in an online survey between March 16–26, 2021.
