Taking early retirement is a life goal for 65 percent of employees, rising to 70 percent for younger people in generation Z, a global study has revealed.
Gen Z, born between the mid 1990s and the early 2010s, has the highest proportion of any generation actively working towards retiring early compared to just 51 percent of the over 55s.
The research, with 11,577 working-age adults from 17 countries, was commissioned by financial education provider Nudge Global to examine employee financial wellbeing.
It revealed a significant geographical difference in employee views on early retirement. Almost three quarters (72 percent) of Americans said early retirement was a specific life goal, compared to just 40 percent of French employees and 26 percent of respondents from Japan.
Researchers said that while people might desire early retirement more in some regions and age groups, only 30 percent of all respondents said saving for retirement was important. And just 18 percent of 16 to 24 year olds identified retirement savings as important. This younger age group includes members of Gen Z and the youngest millennials.
Researchers said the results suggest a disconnect between the idealistic notion of early retirement, versus the reality of prioritising saving for it.
Globally, 69 percent of respondents said they have a general financial plan in place to achieve their goals, yet 42 percent admitted this is only an ‘informal’ plan that spans three years or less.
However, 70 percent of Gen Z respondents said they have a general financial plan in place, compared to just 60 percent of 45 to 54 year olds.
Tim Perkins, co-founder and CEO at Nudge, said: “The way in which people view retirement, and particularly early retirement, is wildly different around the globe. From the US, where culturally a measure of financial security and freedom is early retirement, through to Japan – where only 26 percent of respondents say they have early retirement as a life goal, we’re seeing that there is no one-size-fits-all approach to financial planning and wellbeing.”
He was surprised by some of the findings this year, particularly around Gen Z’s approach.
“With 70 percent of this generation citing early retirement as a life goal they are actively working towards, and 70 percent of them having a financial plan in place to achieve their goals, this bodes well for the financial health of the population in future. It is also perhaps an indicator that priorities around long-term work/life balance are shifting, and shows a new level of cognisance which is a positive trend for peoples’ financial future.”
Andrew Mulder, people director at Nudge, added: “Encouraging and enabling retirement planning supports a healthy talent planning conversation where employers understand people’s career and life goals and can help meet them.”
