Asset manager Charles Schwab published the findings of its 2022 401(k) Participant Study – Gen Z/Millennial Focus on Tuesday.
Nearly 5 in 10 Gen Z and Millennials want crypto in retirement accounts
As per the survey, which involved 1,000 plan participants aged 21-70 years, almost 5 in 10, or 46% of Gen Z and 45% of Millennials, said they would like to have cryptocurrencies added to their retiremend funds. Comparatively, about 31% of Gen X and just 11% of Boomers said they wish they could add crypto to their retirement plans.
The online survey also found that 43% of Gen Z and 47% of Millennials are already saving for retirement by investing in cryptocurrencies outside of the offered plans. In comparison, 25% of all survey participants said they are saving for retirement by investing in crypto, while individual stocks accounts for over 50% of investments in retirement funds.
As well as crypto, 4 in 10 Gen Z and Millennials wish they could invest in 401(k)s through annuities. More than a third say they would invest in ESG if they were added to their retirement accounts, with a similar percentage saying they would choose fractional shares that allow one to invest with little money.
Gen Z and Millennials are looking at ‘diverse assets’
According to the survey, while more than 60% of Gen X and Boomers started investing through their 401(k), only about 37% of Gen Z say their first investment was through such sponsored retirement accounts.
Instead, a majority of the younger population make their first investment through mobile-based trading apps and buying crypto at marketplaces.
Catherine Golladay, Head of Schwab Workplace Financial Services said in a press release:
“Younger workers today are beginning their financial journey from a different place than older generations did when they began…They are questioning traditional approaches to both work and retirement as they have changed jobs and reconsidered priorities during the pandemic. The 401(k), while still their primary retirement savings tool, is no longer viewed as their only path to retirement. They see an opportunity to reach their financial goals through diverse assets that are making them excited about investing and engaged in their financial futures.”
Inflation and monthly bills are seen as huge obstacles to saving for retirement for Gen Z and Millennials. Education costs like paying children’s fees or student loans, and providing financial support to other family members were also cited as impacting the younger generation’s saving plans.