Edward Jones study: Young clients want to retire early but aren’t ready

Many younger Americans dream of retiring early, but a new Edward Jones study suggests they’re financially unprepared to achieve that. 

The St. Louis-based regional-national broker-dealer giant published results of a study on Tuesday that found young clients at the firm — defined as those ages 18 to 34, whom Edward Jones calls “GenNext” (not to be confused with Generation X) — want to retire at 61, three years before clients aged 35 to 64. Despite this, many haven’t begun to plan for retirement yet, according to their financial advisors who participated in the study. 

“Instead of focusing on retirement, financial advisors report that GenNext clients are prioritizing other aspects of their lives including planning for a family (30%), being responsible with everyday expenses (28%) and investing (23%),” Edward Jones said in a press release on the study Tuesday. 

Part of the delay in retirement saving is likely what Goldman Sachs has termed the “financial vortex” of competing responsibilities that today’s working-age professionals face in America: They not only are struggling to pay off student loans, raise families and provide caregiving, but also have been squeezed by inflation and rising interest rates. There’s also the temptations of keeping up with the Joneses and FOMO culture, for younger earners who are eager to enjoy their first taste of wealth. 

READ MORE: How the FIRE movement keeps burning in a tough economy

The study suggests that financial advisors can help young earners with making room for their golden years and prioritizing amid the chaos, growing their books sustainably into the bargain. 

“Although GenNext [has] grown up with the internet, they actually really prioritize meaningful interactions, and they want to sit down, have those deep meetings with financial advisors,” Julia Bartak, a financial advisor at the firm based in the Kansas City area, said in an interview. “They don’t just want a quick phone call. They really want a plan. They don’t know where to start. They’ve got all these short-term goals that they need help prioritizing. How do we get through these to focus on long-term?” 

Bartak said around 10% to 20% of her current clients are GenNexters, and the biggest regret they have is not having gone to a financial advisor earlier. “When their investable assets get to be over $100,000, that seems to be the number where …  they feel like, okay, now I can benefit from professional advice.” Younger clients who have paid down a load of debt or have a new handle on short-term goals also come to Bartak. She often gains GenNext clients by calling the children or grandchildren of her older clients just to ask how they’re doing and what she can help with; they often respond appreciatively. 

Although “GenNext” has, more than any prior generation, grown up in a world with a surfeit of information, their problem is not knowing how to cut through the noise. “They’ve got access to many different sources. They don’t have someone they can trust to really pare it down and help them with a plan,” Bartak said. 

A client she worked with last week had, for instance, been paying down a mortgage but not touched their student loans and had scant emergency savings, she said — something she worked with them to rectify in addition to discussing retirement. Budgeting and not overspending is generally another big concern, she said. 

Morning Consult conducted the study for Edward Jones by polling 200 financial advisors nationally from Oct. 14 to Oct. 16. It follows another study Edward Jones released results of in October, which looked at sample GenNext adults based in Atlanta; Boston; Charlotte, North Carolina; Cleveland; Dallas/Ft. Worth; Denver; Los Angeles; Phoenix; and Raleigh-Durham, North Carolina. 

That earlier study found that GenNexters prioritize togetherness in their close relationships and mental health, with 31% of GenNexters ranking mental health as the top contributor to wellness. These young workers, according to the study, generally prize “comfort above all” and want a purposeful life that leaves them with enough money to feel secure, but not necessarily extreme wealth.