Fifty-nine percent of global workers between the ages of 20 to 29 expect to be financially worse off in retirement than their parents’ generation, according to a recent study by Transamerica Center for Retirement Studies.
“Saddled with student debt and scarce job prospects, our research shows that today’s twentysomethings are finding it difficult to embark on their careers and gain their financial footing,” said Catherine Collinson, president of TCRS.
One such challenge is the expectation of financially supporting aging parents, with one-third of U.S. twentysomethings expecting to provide such support.
The survey found that 35 percent of U.S. twentysomethings are "habitual" savers who "always make sure" they are saving for retirement.
Thirty-six percent said they are "aspiring" savers. However, 55 percent have not yet made saving a priority.
“For twentysomethings, retirement is decades away. However, by making saving a priority today, their long-term savings horizon will help their savings grow with the compounding of investments over time,” Collinson said.
According to Transamerica, twentysomethings recognize the value of a workplace retirement plan with employer contributions, with 84 percent of young Americans reporting it will be an important factor when choosing their next job.
Sixty-seven percent of Americans said they would be encouraged to save more if they received a raise and 39 percent said a generous 401(k) employer match would encourage them to save more.
Thirty-two percent of American twentysomethings said they would be encouraged to save more with simpler investment products that are easier to understand. One-third said more generous tax breaks on long-term savings and retirement plans would encourage them to save more.
“Twentysomethings are ready and willing to take responsibility of their financial futures, but need the support of employers, retirement providers and governments to help them achieve their retirement goals,” said Collinson.