Members of Gen Z and millennials understand the value of building a retirement fund, but face conflicting financial concerns that prevent them from adequately preparing for retirement, according to a report released Wednesday by Betterment for Business, a 401(k) service provider.
By 2020, younger workers will comprise half the global workforce, Betterment noted in a statement.
With workers increasingly responsible for funding their own retirement, confusing financial advice and subpar plans have left many unprepared and unaware of how much they need to be saving.
Market Cube, a research panel company, conducted an online survey in the fourth quarter to which 1,001 adults living in the U.S. responded. Of these, 695 were millennials and 306 were Gen Zers.
The survey asked participants how they were doing with their finances. Seventy-seven percent of respondents said thinking about finances caused them stress.
This is not surprising given that both generations are weighed down by unprecedented debt: Three in four said they owed credit card debt, with one in three owing more than $5,000; and nearly half had student loan debt.
Betterment said those with high levels of debt may need to significantly reduce their current spending rates, or face substantial lifestyle changes in the future.
Still, 82% of millennials and 71% of Gen Zers in the survey said they did not feel too young to start saving for retirement.
About nine in 10 respondents overall reported that they actively saved some money every month, but a fifth said they saved less than $100 monthly in total, including in their retirement accounts.
“It’s clear that millennials and Gen Z want to save for retirement, but this goal can be deprioritized when they’re faced with student debt, medical bills, or other expenses that arise,” Edward Gottfried, director of product at Betterment for Business, said in the statement.