Oh, youth and the promise of infinite possibilities.
Millennials may be burdened by student debt and may not be making as much as their baby boomer parents were at the same age, but many of them remain optimistic about their future, feeling more financially secure and in better shape for retirement. The middle age and the older set — not so much.
A New York Life survey of more than 1,800 adults ages 30 or older recently completed by Ipsos Public Affairs showed that older millennials (30 to 35 years old) were moving quickly into “financial adulthood,” with 71 percent expecting to be more financially secure/better prepared for the unexpected in 2017. In comparison, 46 percent of Gen Xers believe that they will be in better shape for retirement in 2017, and only 52 percent believe that they will be more financially secure. (Three out of four older millennials did.)
And when it came to the baby boomers, that 52- to 70-year-old group came off as a financially stressed-out generation. Only one in three say they will be in better shape for retirement, a worrisome figure since many boomers are only a few years from retirement. Hurting for funds, only 22 percent of boomers”plan to spend more on ‘fun’ purchases, like vacations or even dining out.
“It’s a tale of three cities for America’s generations as they head into 2017,” Mark Madgett, senior vice president and Head of Agency Department, New York Life, told AdvisorNews. “The stark contrast between Maturing Millennials and their Gen X counterparts, who aren’t all that much older, is equally promising for Millennials and worrying for Generation X. A source of tremendous concern is the Baby Boomers, who are clearly showing the strains of heading into retirement without the kind of financial planning many sorely need.”
Nonetheless, Americans in general were feeling better about the future. The study revealed that 43 percent of Americans are optimistic about their financial situation for 2017, a 12 percentage point increase from the 31 percent who said the same thing in a similar survey conducted in 2011.
Much of the financial stress for the older generations apparently comes from their changing fortunes in the workplaces. Boomers, for example, are the least optimistic about career advancement, with only 20 percent hoping for a move up. For Gen Xers, 46 percent anticipate betterment on the job in 2017, while 70 percent are counting on workplace improvement.
Other findings from the survey:
▪ 76 percent of millennials, 70 percent of Gen Xers and 62 percent of boomers plan to reduce debt in 2017.
▪ 83 percent of millennials, 68 percent of Gen Xers and 54 percent of boomers plan to save more this year.
▪ 73 percent of millennials, 63 percent of Gen Xers and 52 percent of boomers plan to make their long-term financial goals for 2017.
▪ 64 percent of millennials, 40 percent of Gen Xers and 23 percent of boomers plan to spend money on important things, such as home improvement, appliances and professional wardrobe.