Early retirement is top goal for Gen Z, yet many don't fund plans

Across the world, 94% of employees say their top goal is to feel secure, while 90% say growing their savings account is the second priority. While the basic value of financial security may be universal, a new study commissioned by financial education provider nudge shows that there are significant differences in employees’ financial attitudes and behaviors across generations and regions.

The study, which was carried out by Censuswide and polled 11,577 working-age adults from 17 countries around the world, shows that early retirement is a goal for a majority of working-age adults (65%).

However, younger workers are more likely to aspire to early retirement than their older counterparts: 70% of Gen Z employees (the highest proportion of any generation) are working towards early retirement vs. just 51% of employees over 55. It’s unclear whether this disparity is due to a generational cultural shift that will hold over time, or if it’s just youthful idealism that fades with age.

While younger employees boast ambitious retirement goals, the study also shows that 25- 34-year-olds also feel the most financially insecure of any cohort. At the same time, only 18% of 16 -24-year-olds answered that saving money for retirement was important. This shows that perhaps there is a disconnect between the idealistic notion of early retirement vs. the reality of prioritizing saving for it.

Attitudes about personal finance also differ greatly between geographic locations. For example, 72% of American employees listed early retirement as a goal, compared to 40% of French, and just 26% of Japanese respondents.

The study demonstrates that employers could do a better job promoting the financial wellness of their employees. Just 43% of employers said they were very confident that they knew how to support employees to achieve their goals. What’s more, 60% of employees said they believed their employer wasn’t interested in supporting them.

One clear area for improvement for many employers is financial education. Although 84% of employers say financial stress impacts their employees’ performance, only 50% of employers reported offering financial education programs, while 38% said they planned to and 12% said they had no such programs in place or plans to create them.

Related: Gen Z eyes early retirement, is more open to financial advice (and AI) than older savers

According Tim Perkins, the CEO of Nudge, these numbers are encouraging because they show improvement on behalf of employers:

“Over the past few years we have seen an increase in employers recognizing the impact of employees’ financial stress at work and offering financial wellbeing programs, this is also shown in our research where even in the past year the amount of employees who have said their employer wants to help them achieve their financial goals has increased by 29%.”

Beyond implementing financial education programs, employers should consider communicating financial information to their employees through a broader set of mediums. As it stands, the top three employer to employee communication forms are:

• email (28%),
• employee surveys (28%), and
• interactive webinars (28%).

Yet 26% of employees answered that in-person workshops or training sessions would best support employee education, and 21% said regular team meetings (through a manager) were best, respectively.