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Research and Statistics

4 in 10 young adult workers have tapped into their retirement funds: survey

Most millennials and Gen Zers are contributing to retirement savings plans, but for many, the money isn’t growing


A new survey shows 73% of millennial and Gen Z workers are contributing at least 3% of their monthly salary to a retirement savings plan. But almost 4 in 10 indicated that they had dipped into their retirement funds to address other financial needs.

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More than 8 in 10 millennials say they don’t feel too young to start saving for retirement. And even among Generation Z, which is just 19 to 25 years old right now, more than 7 in 10 say the same.

But they’re not just talking big. Eighty-eight percent of the combined group say they are actively saving money on a monthly basis, and 73% are contributing at least 3% of their monthly salary to a retirement savings plan.

That’s the good news out of Betterment for Business’ recent “Employee Retirement Preparedness: Millennials and Gen Z” survey, which tracks the financial well-being and retirement preparedness of full-time employed U.S. millennials and Gen Z (ages 19-39).

Now for the bad news.

While these young adult workers seem to understand and embrace the concept of saving early for retirement, not all of them have been able to keep their retirement savings intact and growing.

See related: Millennials aren’t as debt-saddled as you may think, survey shows

Almost 4 in 10 of the survey respondents (38%) indicated that they had dipped into their retirement funds to address other financial needs.

The most common reason was to cover unexpected expenses, a large category of which is medical bills. Thirty-eight percent of those who tapped their retirement funds indicated this as their reason to do so.

Paying off debt was the second most common reason, reported by 33% of those who dipped into their retirement account. This is likely unsurprising as the survey also found that three-quarters of respondents said they hold some credit card debt and almost half (47%) owe on a student loan.

Most disconcerting, however, is that almost a quarter of those who tapped retirement savings (23%) indicated they did so to fund travel or leisure activities.

Betterment for Business’ survey was conducted online in October 2019 among 1,001 U.S. residents who were born between 1981 and 2001 and who hold full-time jobs. Results were released March 10, 2020.

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