What’s Up With The Millennials?
The baby boomers are kicking and screaming their way into the sunset and Generation X is sliding into middle age. That leaves the millennials – also known as Generation Y – as the latest demographic to find a seat at the grown-ups’ table.
This is the generation that saw the dot-com bubble and the housing meltdown rip their parents’ investments to shreds. This also is the generation that emerged from college saddled with debt and facing disappointing job prospects. And this is the generation that many describe as “entitled” and “high maintenance.”
So how are they faring financially? Some recent studies took a look.
According to the 2014 Insurance Barometer Study, released by Life Happens and LIMRA, younger consumers are noticeably more anxious about their financial plans, despite being best suited to take actions now that can make a difference.
According to the annual study, half of consumers age 25–34 (52 percent) state they are very or extremely concerned about having sufficient funds for a comfortable retirement compared with just 47 percent of consumers age 35–44. Nearly a third of millennials (27 percent) are as concerned about paying for a child’s schooling (compared with 21 percent of those age 35–44) and burdening others with final expenses (28 percent, compared with 19 percent of consumers age 35–44). Surprisingly, consumers under age 25 show the most worry of all age groups when it comes to paying for medical expenses (43 percent are very or extremely concerned), leaving dependents in a difficult situation if they were to die prematurely (38 percent), and paying for a child’s schooling (36 percent).
Although millennials pride themselves on their ability to use technology to do just about everything, another study showed them to be surprisingly “old school” in some ways.
Northwestern Mutual’s 2014 Planning and Progress Study showed that millennials recognize the importance of saving and investing and tend to be more proactive about planning than their older counterparts. Other highlights of the study showed:
- Only 14 percent of millennials say that when it comes to saving and investing, they are aiming high and pursuing as much growth as possible
- 30 percent favor “slow and steady” as their financial planning approach while another 30 percent would prefer to be more cautious but feel they have a lot of catching up to do
- They’re even more financially disciplined than their grandparents. Even though they’re just starting out, 62 percent of millennials say they are “highly disciplined” or “disciplined” financial planners, as compared to 54 percent of adults age 60 and over.
Although they may be ahead of the curve in making financial planning a priority, the large majority of millennials recognize they can do even better. More than two thirds said their saving and investment plans have some room for improvement but 28 percent said that they are uncertain where to find help.
Finally only one in eight of this age group has a financial advisor, leaving this cohort ripe for guidance from someone who can set them on the right path.