By Lyndsey Hall
Millennials are the lucky bunch who, born between the early 80s and the early 00s, had the privilege of graduating into – or growing up in – the recession. As a result, Generation Y, as they are also known, are much more cautious with their money than their predecessors: the Baby Boomers – who were born into one of the most wealthy and optimistic periods of history; in the post-war peak between 1946 and 1964 – and Generation X – the group that preceded Gen Y; born between the early 60s and the early 80s.
Baby Boomers see themselves as a special group; they took the world out of the World War II slump, benefitted from high wages and low prices, and were much more liberal than previous generations. Consumerism was the order of the day; a reaction to years of austerity during the war. On the other hand, Gen X are well-known for their inclination to work for long term systematic and institutional change: championing human rights, having benefitted from a higher level of education than their parents. Generation Xers are known for being entrepreneurial idealists, not content with working for someone else and establishing a ‘job for life’, they are more likely to own their own business, or be freelancers.
Millennials, however, have come of age in a particularly financially unstable time; the recession has scared them off making any large financial commitments and inspired them to start saving for their retirement as early as possible – they no longer trust the government to support them in their old age, and are keen to avoid having to work until well into their 70s or 80s.
68% of Millennials are “very” or “somewhat” confident that they will be able to fully retire someday and have a comfortable lifestyle
According to a survey, 74% of millennials have started saving at a median age of 22, which is 5 years earlier than Gen X, and 13 years earlier than Boomers. 66% of Gen Yers expect the majority of their retirement income to be self-funded, and 60% intend to retire at 65 or sooner. A huge 34% said they intended to retire even sooner, which makes a stark contrast to the intentions of Gen X and Baby Boomers; 54% and 65% of whom, respectively, intend to work past 65, or plan not to retire at all. However, 50% of Gen Yers intend to still work after retirement, with 37% hoping to work part-time and 13% full-time. 47% of those who intend to continue working want to do so to stay involved or because they enjoy what they do – a huge increase on Gen X and Boomers.
Sixty two per cent of Millennials plan to phase into retirement gradually; reducing their hours to allow them to enjoy more leisure time, or working in a different capacity with less pressure and more job satisfaction. 41% expect to need to financially support their aging parents or other relatives when they have retired.
Millennials value retirement benefits very highly, with 90% valuing a workplace pension scheme, and two thirds saying that they would move companies for a similar job with better retirement benefits.
According to an article in TIME, Millennials’ spending habits are very different to previous generations too. As a result of coming through the recession, they are delaying marriage, parenthood and homeownership until they feel more financially secure. They are hesitant of making large financial commitments, and wary of credit due to the number of banking scandals that have been exposed in recent years. 65% of the Silent Generation, those born between the Great Depression and World War II, and 48% of Baby Boomers were married between 18 and 32 – only 26% of Millennials between those ages are married. However, 69% said that they would like to marry at some point; but they are waiting until they can afford it. Only 42% said that they intended to have children: a huge drop from 78% only 20 years ago; but again, the main reason why Millennials don’t see themselves having children is financial, rather than that they don’t want to.
Are you surprised by these statistics? What advice would you give to millennials who are just embarking on their careers? Do you agree with their decision to save for retirement now and leave the big life decisions for later? Let us know your thoughts in the Comments.
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