The national survey of 2,280 young adults, ages 18-39, conducted by Georgetown University Business for Impact’s AgingWell Hub, part of the McDonough School of Business, found one in four young adults say the pandemic will have a lasting negative impact on them financially, while one in three Millennial parents feel financial strain and project long-term repercussions.
The survey found that 25% of adult Gen Zers (ages 18-23) and 35% of Millennials (ages 24-39) had spent savings or delayed saving or paying off debt as a result of the pandemic.
“It’s not just student debt but also the persistent presence of credit card debt that is impacting these two generations at every life stage,” said Diane Ty, senior partner at Business for Impact and interim director of the AgingWell Hub, who led the study. “Servicing monthly debt means less ability to start saving for retirement when time is on your side or building other assets like home ownership.”
Gen Z and Millennials lag in retirement savings, the survey found, which is troublesome as they need to start early to account for their longer life expectancy. The survey showed three in four do not have employer-sponsored retirement accounts and most do not have strong role models for building retirement savings.
Only one-third of Millennials and 7% of Gen Z reported having a retirement account. Even fewer—16% of Millennials and 5% of Gen Z—own a brokerage account for investing.
The report shows lower-income individuals are much less likely to own or have access to employer retirement savings plans and/or the ability to contribute to a plan. Just 8% of young adults households earning up to $25,000 have a retirement account, while 43% of young adult households earning $100,000+ have retirement accounts and are four times more likely to own a brokerage account.