“Listen to Your Elders” is not always true, at least when asking millennials about their retirement plans.
Right or wrong, good or bad, millennials, or those born between 1981 and 1996 have an approach to saving for retirement that is very different from the generations before them.
From how they work to how they save, they avoid X and build their own path.
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That independence is partly a by-product of the environment in which they are older. It is also shaped by the tools and technologies available. But one thing is certain, both generations share the same concern. Whether they have enough money to retire comfortably.
Among Gen Xers, 63% are worried about living longer than retirement savings. According to a BlackRock survey, 56% of millennials.
That’s where the similarities end. Beyond that, millennials approach retirement in these amazing ways than XERS Gen Xers.
1. They have started preserving previously
It is now almost established that the earlier you start saving to retire, the better you will be when you decide to quit. And it’s even better if you save on retirement savings plans sponsored by tax-based companies like 401(k).
For Gen X, it was not given. That was the case for millennials. As a result, millennials began saving faster than their older counterparts. Adding an automatic 401(k) registration to the mix makes it easy to see why Gen X is catching up in terms of retirement savings.
Bryan Bibbo, president and CFO of JL Smith Holistic Wealth Management, is 35 or 40 years old, and millennials are ahead of the Gen Xers in terms of savings for retirement.
2. Less risk aversion
From cryptocurrencies to ETFs, many things have changed in terms of how retirement savers can invest their money, and millennials aren’t afraid to test water.
After all, millennials are happy to take risks as they tend to grow up during their 10+ years of bull run on the stock market and believe everything is up.
Meanwhile, Gen X has lived through the Dotcom bust and the Great Recession of 2008 and 2009, but as a result, he is far more skeptical and conservative about investment.
“Millennials are willing to take much more risks than Generation X,” said Stephanie Themeperiti, wealth advisor at Hightower Wealth Advisor.
3. They value advice
Gen Xers is an independent group. After all, they were latchkey kids, sent for play that was not monitored until dark. They had helicopter parents not controlling their every move. As a result, they tend to go on their own rather than seeking advice from a financial advisor.
Millennials are different. “They tend to work with financial advisors at an early age compared to Gen X, which has restricted it,” Bibbo says. “Gen X is a bit embarrassed that they’re not on track. Millennials say I trust you and you’re professional and you’ll get me on track.”
4. They are more tech-savvy
Millennials are the first generation growing on mobile devices, and by default they are more tech-savvy than Gen X. This has permeated everything, including robo-advisors, investment apps, and ways to save money for investing and resigning, whether using an online trading platform.
They can also be more informed investors with the wealth of financial information available on the Internet.
“Millennials don’t seem to be skeptical of the financial tools and some of the older Gen Xers,” said Bill Van Sant, managing director of Girard at Univest Wealth Division.
5. They don’t want to wait to pursue happiness
Work hard and have fun when you eventually retire. They are willing to see what it gets you and, as a result, to wait for them to pursue their happiness, even if it costs them their retirement savings.
“They want to find fulfilling jobs, have a good life and enjoy life as much as they can,” says Tomori. “They don’t want to wait until they retire to do everything they want to do.” Gen X doesn’t subscribe to it and tends to be a little more modest than millennials.
The judges are still out
Without a doubt, Millennials and Gen X approach retirement investments and savings differently, and there has yet to be a ju umpire to see which generations have it right. Does millennials’ preference for risk explode in their faces? Does General Zeas regret their reluctance to embrace technology?
Generations may disagree with how they will get there, but the key point is that both recognize the value of savings for retirement.
