Login | June 29, 2022

Nationwide study finds millennials confident about their finances

KEITH ARNOLD
Special to the Legal News

Published: May 24, 2022

Of the three generations that make up the largest segment of the nation’s workforce, millennials are most confident they are in a position to protect their finances and investments should another crisis occur, an annual Nationwide Retirement Institute study found.
More than half of the millennials participating in the seventh annual Advisor Authority Survey said they were in a good position to protect their finances, compared to 43 percent of Generation X respondents and 33 percent of baby boomers.
In keeping with millennials’ rosy outlook, the cohort’s financial expectations for the next year improved by 16 percentage points from 2020 (38 percent) to 2021 (54 percent).
Gen Xers’ level of optimism rose 9 percent to 49 percent during the same period, while boomers’ grew by 12 percentage points to 45 percent.
“Compared to other generations, millennials have lived through more formative events, including three significant financial crises, in a short time span,” said Kristi Martin Rodriguez, leader of the Nationwide Retirement Institute. “Those disruptions have increased their awareness of the importance of planning for the unexpected and taking ownership of their financial futures.”
The youngest generation in the study, millennials encompass individuals aged 26 to 41years old, a group that has been pegged with stereotypes of careless spending and saving habits since the early 2010s, a press release noted.
The most recent study, however, demonstrated that the oldest members of this generation who now are entering their 40s are shattering old perceptions by applying what they’ve learned after enduring past financial crises.
“Our data shows the old stereotypes are either untrue or out of date,” Rodriguez added. “Millennial investors are focused on taking steps to achieve financial stability now, while preparing for unforeseen events on their way to a secure retirement.”
The survey found that millennials with investable assets of $100,000 or more reported that the global pandemic and the 2008 financial crisis––33 percent and 23 percent, respectively––were events that had the most profound impact on them, making them more cautious, proactive and confident in the way they face the future.
About eight in 10 millennials are concerned about an economic recession, compared to 71 percent of Generation X and 63 percent of baby boomers.
Despite the high level of concerns, however, millennials feel more prepared to address unforeseen events than their older counterparts, the survey reported.
As for retirement, 60 percent of millennials are confident in their ability to prepare for and live in retirement, based on their experiences living through past financial crises. More than three quarters of millennial respondents reported having a strategy in place to protect against outliving their savings.
The strategies include leveraging Social Security (47 percent), in-plan income guarantees (38 percent), dividend yielding stocks (31 percent) and longevity insurance/deferred income annuities (31 percent), the study noted.
Millennials’ prioritization of risk-mitigation strategies for short-term protection have carried over to their long-term planning as well.
In fact, more millennials are likely to choose an annuity to protect against market risk (85 percent in 2021 vs. 72 percent in 2020) than before. Millennials are also actively seeking the advice of financial professionals, with 66 percent already working with one.
Nationwide’s seventh annual Advisor Authority Survey was conducted online within the United States by The Harris Poll from July 22 to Aug. 17, 2021. Among the 839 investors, were 34 Gen Z respondents, 179 millennials, 209 Gen X respondents, 355 baby boomers and 62 respondents ages 77 years and older. Respondents for the survey were selected from among those who have agreed to participate in Harris Poll surveys.
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