Northwestern Mutual: America’s youngest adults plan to retire earlier than any generation before them

New data from Northwestern Mutual’s 2022 Planning & Progress Study revealed that Americans between the ages of 18 and 25 – known as Gen Z – were the most likely to build savings during the pandemic and begin working with an advisor. The study also showed that these young adults were more confident about their careers and in their ability to achieve financial security.

That confidence comes with caveats, however. Gen Z adults were also the most inclined to say their financial planning needs improvement. They also struggle more with mental health than any other age group.

Gen Z’s Instinct to Plan

According to Northwestern Mutual’s research, Gen Z – more than any other generation – improved their financial habits during the pandemic. Seven in 10 (70%) adults from the age group reported higher savings over that time period. They were also more likely to seek professional financial help, with nearly three in 10 (29%) saying they did not have an advisor before the pandemic but have either started working with one or plan to moving forward. Despite that, close to 75% of Gen Z adults said their financial planning needs improvement.

All U.S.
Gen ZMillennialsGen XBoomers+
I have been able to build
my savings during the
60 %70 %61 %50 %62 %
I didn’t have an advisor
before, but moving
forward I will work with
one/have started working
with one
18 %29 %24 %21 %7 %
My financial planning
needs improvement
62 %74 %74 %69 %41 %

“It’s encouraging to see the youngest generation of adults showing an inclination to plan and holding themselves to a high bar,” said Christian Mitchell, executive vice president and chief customer officer at Northwestern Mutual. “Developing a plan isn’t just the first step toward achieving your long-germ goals, it’s also what allows you to enjoy your life more along the way. With greater clarity around how to balance spending and saving, you’re able to live more in the moment and still have confidence in the future.”

Confident but Struggle with Mental Health

Gen Z had the highest levels of confidence in their careers and in their ability to achieve financial security. The research also showed that they plan to retire younger than any other generation – before the age of 60 and a full 12 years earlier than Boomers+.

All U.S.
Gen ZMillennialsGen XBoomers+
I have had / will have a
successful career
72 %79 %74 %64 %75 %
I have achieved / will achieve
long-term financial security
66 %70 %66 %58 %70 %
Social Security will be there
when I need it
56 %55 %52 %43 %70 %
I expect to retire at age

Yet, while Gen Z is looking forward to an early retirement, money is not what drives most of them at work. Nearly two-thirds (64%) said personal fulfillment is more important in a career than money (36%).

But contentment is elusive, and Gen Z’s assessment of their own mental health stands out as considerably more fragile than all other age groups. The study found that 44% of Gen Z reported their mental health as weak or very weak compared to only 26% for all U.S. adults.

All U.S.
Gen ZMillennialsGen XBoomers+
Current state of mental health
is weak / very weak
26 %44 %31 %31 %13 %

About The 2022 Northwestern Mutual Planning & Progress Study

The 2022 Planning & Progress Study was conducted by The Harris Poll on behalf of Northwestern Mutual and included 2,381 American adults aged 18 or older, with oversamples of Gen Z, who participated in an online survey between February 8 – 17, 2022.  Results were weighted to Census targets for education, age, gender, race / ethnicity, region and household income. Propensity score weighting was also used to adjust for respondents’ propensity to be online. No estimates of theoretical sampling error can be calculated; a full methodology is available.

About Northwestern Mutual

Northwestern Mutual has been helping people and businesses achieve financial security for more than 165 years. Through a holistic planning approach, Northwestern Mutual combines the expertise of its financial professionals with a personalized digital experience and industry-leading products to help its clients plan for what’s most important. With more than $561 billion in combined company and client assets, $34 billion in revenues, and $2.1 trillion worth of life insurance protection in force, Northwestern Mutual delivers financial security to nearly five million people with life, disability income and long-term care insurance, annuities, and brokerage and advisory services. Northwestern Mutual ranked 97 on the 2022 FORTUNE 500 and was recognized by FORTUNE® as one of the “World’s Most Admired” life insurance companies in 2022.

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, WI (life and disability insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries. Subsidiaries include Northwestern Mutual Investment Services, LLC (NMIS) (investment brokerage services), broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company® (NMWMC) (investment advisory and services), federal savings bank; and Northwestern Long Term Care Insurance Company (NLTC) (long-term care insurance). Not all Northwestern Mutual representatives are advisors. Only those representatives with “Advisor” in their title or who otherwise disclose their status as an advisor of NMWMC are credentialed as NMWMC representatives to provide investment advisory services.

SOURCE Northwestern Mutual