Millennials and Gen Z want more than a 401(k) for retirement savings. They want crypto

When it comes to retirement savings, Gen Z and millennials don't want to just "set it and forget it." Instead, these younger generations are taking a more proactive approach to their long-term savings, engaging in a variety of investment strategies to see what sticks. 

According to Schwab Retirement Plan Services' annual 401(k) retirement survey, 401(k)s remain the primary retirement savings vehicle for employees, yet Gen Z and millennials are more likely to also invest in cryptocurrency and use online trading apps than older generations. 

Read more: HR 101: How to help Gen Z workers get a head start on their retirement 

While the good news is that younger generations are open to saving by any means possible, this approach could make it more challenging for employers to offer appropriate advice and guidance, says Nathan Voris, director of investments, insights and consultant services for Schwab Retirement Plan Services. 

"Gen Z in particular have investments and savings beyond the 401(k), so if you're a 401(k) provider or employer, you have to figure out how to provide advice and guidance for someone who has multiple buckets of money," he says. "That can be more complex." 

Younger generations are open to a variety of outreach efforts: while Gen Z and millennials are more likely to use online financial wellness tools than their older colleagues, they're also more likely to seek out personalized advice from a financial adviser. Schwab found that 83% of Gen Z and millennials want personalized advice, compared to 67% of boomer employees. 

Voris says it's a good sign that younger workers are so engaged in their financial lives and are proactively searching for help and guidance. Employers can work to fill that knowledge gap by "meeting people where they are," through their engagement strategies and investment offerings.  

Read more: New to work? It's never too early to start planning for retirement

Schwab found that 70% of younger employees want to feel that their investment options match their personal needs and values — be it by offering cryptocurrencies as part of a 401(k), or having an ESG option. Yet employers have a long way to go to meet those needs, Voris says. 

"We all have the content and the ideas and the tools and the calculators to help somebody get on the right track. But how does someone want to engage with that? Is it fully digital? Is it a sit down with a human in person?" Voris says. "We don't have crypto available in the [Schwab] 401(k) today. Right now there's not a lot of access to that but we'll see what the future holds." 

Voris advises employers and employees to not limit themselves by the traditional views of retirements and savings. Instead, offering robust financial wellness benefits that support an employee's full financial picture could be the ticket to getting employees in a financially confident place. 

"Think beyond the original view of a 401(k) and about things like debt management, budgeting, emergency savings solutions or whatever it is to match the needs of the individual within your benefits package," Voris says. "Younger people have competing priorities, so having solutions for debt management and student loans is important. As long as people are anchored in what their risk tolerance is, and ask, am I approaching this in a way that's informed, all kinds of things can be a part of someone's portfolio."