In March 2018, Pew Research Center released a new study seeking to more conclusively define the Millennial generation. The study concluded that a Millennial is someone born between 1981 and 1996, making them now, in 2018, between the ages of 22 and 37. While it is of course impossible to conclusively define a “generation”, cultural and historical touchstones are helpful to provide a more practical perspective.
For instance, Millennials likely did not have to deal with dial-up modems, bother with flip phones or, due to the ubiquity of GPS, ask for directions. Aside from the obvious technological advances, Millennials get married and buy homes later than preceding generations, and are less likely to have to dress up for work! However, as this generation ages there are surely signs that (surprise!) Millennials are not so different than the rest of us.
A recent story in USA Today noted that 16% of Millennials now have $100,000 or more in savings. This fact goes against the stereotype of Millennials as being foolish with money and not being long term planners. It is important to remember that Millennials came of age during the worst financial crisis since the Great Depression. There certainly is a lingering financial angst that comes along with that, as well as the ballooning student debt burden of so many adults within this age group.
Of course not all Millennials are on their way to becoming great savers. A recent CNN/Money survey found that 66% of Millennials had nothing saved for retirement. While this survey defined the group as only those between 21 and 32, it is still important to note that unique circumstances facing this generation make saving and retirement planning more unique and, perhaps, more difficult. Student loan debt continued to escalate throughout this period and as of 2016 the average student graduated owing over $37,000. Of course wages have not kept pace with this debt growth, where many Millennials entered the job market during a recession. Additionally, employer sponsored retirement plans such as 401k plans are now less pervasive, especially with the rise of the “gig” economy.
The benefits for many Millennials in having information at their fingertips, and the ability to work from anywhere goes hand in hand with the accompanying changes in how companies and industries now treat staffing. This means that the job security of sticking with one company throughout your career is not possible, and in fact often not what Millennials actually desire. However, having to forge a new path towards savings and retirement does not mean that retirement goals need to be foregone. No matter your specific goals, the principles of sound financial planning still endure, including the benefit of budgeting and early saving to capture the value of compounding returns.
Surely many BWFA clients have children and grandchildren in their lives that fit into this Millennial generation, and likely you have observed many of the changes, financial and otherwise, touched on here. At BWFA we value above all else the trust our clients put in us to help them achieve their unique and individual financial goals. We are here to provide guidance and support to clients of all ages and circumstances, and who among us has not wished we had known back then even a little bit more of what we now know!
For more information, or to refer your own Millennial please contact BWFA or your advisor at 410-461-3900.
Meghan Manas | Director of Client Services | firstname.lastname@example.org