Nearly a quarter of all Gen Z employees aren’t enrolled in a company retirement plan, according to BenefitsPro. That’s three times the rate of millennials, Gen X, and Boomers. In addition, 12% of Gen Zers don’t take advantage of any workplace benefits at all, twice the rate of other generations.
Here are ways plan sponsors can help prevent their youngest workers from experiencing financial FOMO by sitting on the sidelines of their employer-sponsored retirement plan.
Tailor plan design. Plan sponsors may improve engagement by offering immediate eligibility for participation and matching, automatically enrolling new hires at modest deferral rates with auto-escalation features, and linking student loan payments to employer contributions. Emergency savings features and Roth options may also resonate with this cohort, helping them manage both short- and long-term needs.
Use short-form videos. Provide education about the benefits of 401(k) participation via TikTok-style videos on internal platforms or social channels. This generation may prefer fast, engaging content over longer-form articles.
Highlight flexibility over distant retirement dreams. Frame contributions as a step toward financial freedom. This could mean taking career breaks or more travel experiences — not just retiring at 65. When young employees can see how retirement savings fuel a lifestyle they care about, they’re more likely to start now.
Make enrollment feel like an app. Use mobile-first, intuitive interfaces for benefits enrollment. Gen Z expects user experiences to feel more like Apple or Amazon, not clunky HR portals. Reduce friction in the user digital experience. Plan sponsors should work with providers who offer enrollment options that mirror the apps Gen Z uses daily.
Offer purpose-driven messaging. Emphasize how financial wellness supports independence and the ability to enjoy a greater breadth of life experiences, or lets them contribute to causes that matter to them. This generation often views money as a means to impact, not just for the purpose of accumulation. Purpose-oriented messaging is likely to resonate more with this cohort.
Integrate with onboarding gamification. Build benefits participation into early-stage onboarding with milestone achievements or rewards. Gen Z may respond well to gamified processes. Badges, or tiered goals can nudge participation. Even something as simple as a “first contribution” celebration badge can provide a motivational spark.
As Gen Z enters the workforce, it does so during a time of economic uncertainty, high student debt, and rising housing costs. They face delayed financial milestones and a different perception of long-term planning. Many also began their careers during the COVID-19 pandemic, shaping a worldview that values flexibility, purpose, and digital fluency, though they still appreciate human guidance. Helping Gen Z build financial resilience today and setting them up for a more secure financial future tomorrow requires the willingness to rethink how retirement planning is communicated and delivered — because the habits they form now will shape their future and the retirement landscape for decades to come.
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