If there’s one good thing to come from the pandemic, it’s that Millennials and Generation Z apparently are more focused on saving for retirement, according to new research.
Findings from a new Voya survey reveal that nearly half (41%) of Millennials have been negatively affected financially by COVID-19. Yet despite those impacts, Voya also found that in thinking about their experiences over the past 12 months, more than two-thirds of Millennials (68%) are now more focused on planning for retirement.
And they apparently are not just saying it. Of those who changed their savings rates in April 2021—a time when stimulus checks and many company bonus payouts took effect—a sizeable majority of Gen Zers (82%) and Millennials (73%) increased their savings rates. These findings are based on Voya Financial’s retirement plan participant database, which also reveals that 72% of participants who changed their savings rate in the second quarter of 2021 increased their savings rate.
While long-term market volatility, economic shutdowns and high unemployment rates produced an environment of financial uncertainty, it also left an imprint on many individuals, highlighting the continued need to prepare for unexpected events, the firm observes. In fact, given their financial experiences over the past year, nearly three-quarters (72%) of all respondents agreed they have become more of a “saver” and not a spender.
Voya notes that this new data aligns with and supports its latest research in “Consumer Sentiment during COVID-19,” showing that nearly two-thirds (63%) of Americans agree the pandemic has made them more focused on planning for retirement, which the firm emphasizes is a promising outlook for the future of retirement savers nationwide.
“We know the COVID-19 financial recovery is not over for many. Still, seeing that some individuals have adopted better savings habits during a time of economic setback shows us that more and more individuals are getting serious about saving for their future,” notes Heather Lavallee, CEO of Wealth Solutions for Voya Financial. “And while it’s not surprising to see Baby Boomers and Generation X saving more—as they may be earning more than younger generations—the pandemic has clearly made saving for the future a priority among all generations as both Millennials and Generation Z are also saving more,” she adds.
Meanwhile, as open enrollment season approaches, Voya notes that there are key opportunities for employers to keep in mind. Among working Americans, the firm’s research also found that a significant number of individuals are interested in support from their employer when it comes to:
- improving their overall financial wellness (81%);
- helping them generate income in retirement (80%);
- providing step-by-step guidance to improve their retirement outlook (78%); and
- helping them navigate life and workplace events, such as accident or critical illness benefits (75%).
These numbers are even higher among working Millennials seeking support to improve their overall financial wellness (83%) and guidance on improving one’s retirement outlook (85%).
“As the economy returns to ‘normal’ and individuals are provided with more opportunity for discretionary spending, prioritizing saving over spending is going to remain a critical component for future success,” adds Lavallee. “We can’t lose sight of the importance of saving for retirement, and employers should help support this momentum.”
In addition to the firm’s retirement plan participant data as of June 30, 2021, the findings are based on the results of a Voya Financial survey conducted June 3-4, 2021, by Ipsos among 1,005 adults.