Gen Z, Millenials have bleak outlook on financial futures, study finds
Most young adults in the US believe they can improve the world, but fewer than half say they can secure their own financial futures
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With recession fears and activism both on the rise, younger generations of U.S. adults have more confidence that they can help solve global issues than they do in securing their own financial futures, fresh data shows.
A new study released Thursday by the TIAA Institute and Business for Impact's AgingWell Hub at Georgetown University found more than half (56%) of Gen Z and younger millennials ages 24-35 believe they can have a role in solving global problems like climate change, social injustice and political division.
U.S. adults in younger generations have more confidence in their ability to impact the world than their own financial futures, a new study indicates. (iStock / iStock)
But when it comes to their own money, young adults' collective outlook is more bleak — and that has researchers concerned.
Most respondents, 51%, said they do not expect to be as well off as their parents.
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"We can’t have people this early in their careers resigning themselves to thinking they won’t do as well financially as their parents did," said Jeanne de Cervens, director of the AgingWell Hub. "We need employers, community groups and others to step up and show young workers how they can plan and get ahead."
Nearly three in four young U.S. adults ages 24-35 are saving in some sort of retirement plan, but fewer than half believe they will be as well off as their parents. (iStock / iStock)
But Gen Zers and young millennials appear to be trying. Nearly three-quarters (72%) of those surveyed said they are saving in a retirement plan either through their workplace or on their own.
Yet, as chronic inflation continues to crush Americans across the board, it is difficult for those early in their careers to see how they can get ahead.
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Forty-two percent of young adults said they are living paycheck to paycheck, and only 33% said they could handle an unexpected major expense. Despite a vast majority of them currently saving for retirement, only a little more than a third said saving for retirement was one of their top three financial goals.
Part of the problem, according to the study's leaders, is where some young adults are looking for financial advice.
Roughly one in five young adults consider social media a trusted source for retirement planning advice. (iStock / iStock)
"About 20% of them turn to social media as a trusted source of information for retirement planning, but there are more proven ways for younger workers to get help," said Surya Kolluri, head of the TIAA Institute. "They should seek out financial advisors to craft plans that meet their short- and long-term financial goals. Employee retirement plan sponsors can also help younger workers by automating retirement plan contributions, offering plans with guaranteed lifetime income and by increasing access to financial wellness tools."
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"Many young people are pessimistic about their financial futures," Kolluri said. "We owe it to them to support their financial wellness and to help them achieve security in retirement so they can continue to change the world well beyond their youth."