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Ettore Toppi March 12, 2024 4 min read

Engaging Younger Workers in Retirement Planning

Ask any human resources manager about engaging younger workers in retirement planning, and you’ll hear the same story time and again: It’s a challenge! Engaging the youngest employees—currently the tail end of Millennials and working-age Gen Zers—in the conversation about retirement planning is notoriously difficult.

That lack of interest can translate into a lack of action. A 2023 NerdWallet study found that 60% of Americans don’t have a retirement-specific account. What’s more, according to data from the Federal Reserve’s 2022 Survey of Consumer Finances, the median retirement savings for people age 35 and under is just shy of $19,000. While investing among younger employees has improved over the last five years, there’s still a troubling lack of engagement. That’s not only a red-flag warning for individuals but also signals broad societal implications in the longer term.

What’s the Disconnect?

Several factors contribute to this disengagement. Retirement can seem like a far-off dream to a 20-something focused on immediate concerns, like towering student loans and sky-high rents. According to a late 2022 Bankrate survey, 31% of Gen Z workers have saved nothing for retirement.

Plus, there’s often a lack of financial education surrounding retirement savings. Simply put, many younger workers don’t know how to get started. Without understanding the benefits and mechanisms of retirement savings plans, younger workers may feel overwhelmed or be uninterested in participating.

The “Soft-Saving” Revolution

There’s something else afoot too. According to a January 2023 study by Intuit, Gen Z is not necessarily looking to retire early—or perhaps even at all. The latest generation to enter the workforce is more interested in personal growth and mental well-being than in saving for an unknown future. The drive for personal fulfillment, coupled with a distrust of the current economy, is fueling a softer approach to saving and investing.

Along those lines, although Gen Z (they are among employees most likely to increase their contribution rate) has begun to take notice of the advantages of a 401(k), they are taking more hardship withdrawals. Those withdrawals suggest that they are prioritizing their short-term needs over future security. And as any financial guide will tell you, that’s a double loser: Those who take this approach squander the benefits of compound growth while paying hefty early withdrawal taxes and penalties.

Tactics to Amp Up Engagement

The takeaway seems to be that retirement planning among younger workers is a study in contradictions. Gen Z simultaneously has taken the savings message to heart in a way that Millennials have not. Yet, while investment is trending up, so are early withdrawals. Engaging younger workers now requires a new take on the subject. Here are a few approaches likely to resonate:

  • Create a culture of financial wellness: Financial wellness programs and education in the workplace help younger workers learn about not just retirement planning but all other aspects of their financial lives.
  • Make it easy: Offer automatic enrollment and savings-increase programs in your retirement plan. This will make it easy for younger workers to start saving, even if they don’t have a lot of extra money. That gives you a head start in advancing the culture you’re trying to create.
  • Keep it relatable: Stress how starting retirement planning early helps those at the beginning of their careers achieve big financial goals. Also, couch your message in language that resonates with younger employees by explaining how smart financial planning aligns with their desire for personal growth and well-being.
  • Focus on today: Emphasize what’s great about your retirement plan design, like employer matching funds and tax-advantaged accounts. Immediate perks are more appealing than a distant payout.

It All Starts with Communication

One of the biggest and most effective tools for bridging the retirement-planning gap is communication. Engaging younger workers requires a strategic blend of education, technology, and fun.

Here are some actionable strategies:

  • Keep it simple: Avoid using financial jargon or technical terms, and instead go with language that younger, less investment-savvy workers will easily understand.
  • Tailor the message: Segment your audience and customize messages. Younger workers might be more responsive to learning about how retirement planning can impact their financial wellness today, not just 40 years down the line. Help younger workers see how retirement planning applies to them personally.
  • Go digital: Use platforms that resonate with a younger demographic. Think mobile apps, interactive webinars, and social media channels. The goal is to meet them where they are. At Segal Benz, we frequently advise our clients to make the benefits experience more like the consumer experience. Late Millennial and Gen Z workers more or less demand it.
  • Engage with visuals and interactivity: Communications that use appealing, creative graphics make complex information more digestible. Infographics and videos are winners for their ability to explain complex concepts in more concise ways. Online tools, like modeling calculators or persona-driven content, are also favorites, because they allow digital natives to interact with the information and explore different retirement planning scenarios in a familiar medium.

The Next Era of Retirement Readiness

Getting younger workers fully engaged in retirement planning is, of course, essential to their long-term financial well-being. At the same time, employers benefit by fostering a more financially secure and satisfied workforce. By understanding the changing culture and needs of younger employees—while adjusting your communication strategies—your organization can begin to bridge the retirement planning gap.

We’re proud to work with organizations that value their people. If you want to learn more, we’d love to talk.


Ettore Toppi

Ettore Toppi, Senior Communications Consultant, creates engaging communications campaigns that ensure employees are informed and connected with their benefits.