But are Millennials as complacent about their financial futures as some tend to presume? Fidelity says many Millennials are fully engaged in their financial futures, and some of the results of its study challenge the common stereotypes about how this generation approaches planning for the future.
To set the scene, Fidelity explains that the average age of Millennials is 30 years, and 43% have already established a 401(k). Another 23% have an IRA, and 40% have children. The average age of Millennials’ parents is 55 for mothers and 58 for fathers—important to note, Fidelity says, because many Millennials turn first to their older family members for financial guidance. About a third (32%) of Millennials’ parents are retired, Fidelity says. Millennials’ average salary is $64,000; average savings is $37,000.
When asked how often they worry about their financial future, 39% of Millennials admit to worrying at least once a week or more often. It appears that women in this generation worry more than men, Fidelity says. While 19% of millennial men say they “never” worry about their financial future, only to 2% of women say this.
Asked who they trust most for information on money matters, about one in four (23%) say they trust no one. Another 33% of Millennials say they trust their parents. While the majority of Millennials (59%) consider their parents to be good financial role models, a fairly sizeable number do not. In fact, 41% of them disagree with the statement, “My parents provided a good example of how to have a successful financial future.”
Furthermore, nearly one-half (49%) say they don’t get financial advice from their parents, and 27% tell their parents nothing when it comes to money. When asked to describe what money means to them from a list of five words, 42% of Millennials chose “security,” 22% chose “stress,” and 21% chose “comfort.”
Encouragingly, Fidelity’s study suggests three-quarters (76%) of Millennials do not have any difficulty starting a conversation with their parents about saving and investing for the future. However, two-thirds (67%) have not had detailed conversations with their parents regarding important issues including estate planning, health and eldercare, and living expenses in retirement. About four in 10 (41%) are not having any conversations at all with their parents about their will and estate planning.
Millennial women vs. men are significantly more likely to think it is important to have frank conversations with their parents about estate planning/wills (86% vs. 56%) and health/eldercare (92% vs. 63%). Slightly more than half (51%) of Millennials assume they will be caring for their parents should they become ill; women are more likely to assume that either they or their siblings will care for their parents should they become ill. Men are more likely to say “they don’t know.”
The top three issues Millennials are trying to tackle are accumulating more savings for retirement (52%), paying off credit card debt (41%), and paying off student loans (28%). Nearly one-half (47%) have started to save for retirement in some capacity. This means that, on the flip-side, 53% are at serious risk of falling behind during critical early savings years, when invested dollars have the longest time to grow.
Two-thirds of Millennials surveyed think it is more acceptable in the wake of the financial crisis for children to move back home after college, and 32% agree they are more financially dependent on their parents than their parents were at the same age. While 80% say they currently live outside of their parents' home and pay all their own expenses, 34% admit that at one point they did have to move back with their parents after they had been on their own.
Nearly one-half of Millennials have received some kind of financial assistance from their parents at some point since leaving home. Topping the list are cell phone bills, car insurance and groceries.
A Fidelity infographic with important savings and investing insights for Millennials is available for download here.