Back off, boomers and Gen Xers! Millennials have learned from your mistakes and will be ready when their own retirement reality bites.
A pair of recent studies show that the millennial generation, those ages 26-41, has been seriously planning for retirement, despite stereotypes suggesting otherwise. In fact, as the oldest millennials step into their 40s, they are applying the financial lessons they absorbed living through past financial crises so as not to suffer the same fates as some unprepared members of older generations.
According to the seventh annual Nationwide Retirement Institute Advisor Authority study, three-fifths (60%) of millennials with investible assets of $100,000 or more said they're confident about their ability to prepare for and live in retirement based on their experiences living through the 2008 financial crisis (23%) and the 2020 global pandemic (33%).
“Those disruptions have increased their awareness of the importance of planning for the unexpected and taking ownership of their financial futures,” Kristi Martin Rodriguez, leader of the Nationwide Retirement Institute, said in a statement, adding that “our data shows the old stereotypes are either untrue or out of date.”
Furthermore, millennials feel more prepared to address unforeseen events than their older counterparts, despite having greater concerns about a potential recession. The Nationwide study, which was conducted online by the Harris Poll, showed more than half of millennials (56%) are confident about their ability to protect their finances and investments should another crisis occur, compared to only 43% of Generation X and 33% of baby boomers.
When it comes to planning for retirement, millennials also have no problem asking for advice.
A separate study on generational retirement beliefs released by Natixis earlier this month showed that 75% of U.S. millennials surveyed employ a professional financial adviser, a higher percentage than either Generation X (67%) or Baby Boomers (70%).
In addition, the Natixis report said financial planning is the professional advice millennials are “most interested in” to help them reach what 86% say are “clear financial goals”, most notably retiring at age 59.
“They’ve known what loss looks like and want to protect their interests as they see risks rise and their finances grow more complex,” said Dave Goodsell, executive director of the Natixis Center for Investor Insight. “The good news is that millennials not only recognize the value of advice, but they trust their financial advisers almost much as they trust themselves.”
Living through a series of financial crises at such an impressionable age has turned most millennials into serious savers, putting aside 19% of their income for retirement on average, according to the Natixis survey of nearly 2,500 millennials around the world, including more than 200 in the United States with minimum investible assets of $100,000.
And they apparently don’t want to depend on their boomer or Gen X parents for help when it comes to their financial futures.
According to the Natixis study, 37% of millennials surveyed attribute their wealth to business ownership or self-employment income and 43% say it comes from investing. Meanwhile, only 13% cite an inheritance or family money as a source of their wealth.
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Survey findings from the Nationwide Retirement Institute offers pearls of planning wisdom from 60- to 65-year-olds, as well as insights into concerns.
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