A Retirement ‘Buddy’ System?
Millennials have a much different relationship with their Boomer parents than Boomers did with theirs — and a new report says that could result in a different kind of retirement.
The majority of Millennials view their parents as peers, mentors and friends, while more Boomers saw their parents as authorities, according to UBS’ Q2 Investor Watch
. And while it may be because they have text, Skype and email rather than long-distance pay phone rates, nearly three quarters (73%) of Millennials say they connected with their parents more than once a week during college, compared with 34% of Boomers.
In terms of work tenure, on average, Millennials have worked at three companies during an eight-year career, while Boomers have worked at four companies over 37 years.
Millennials are far more likely than Boomers to have sold investments during the financial crisis, and many regret sitting on the sidelines during the recovery. As a result, less than a third of Millennials are content with their portfolios today, compared with 78% of Boomers. The report notes that most Millennials are unsure of what to do next, or are waiting for economic conditions to improve before investing further.Finances
When it comes to finances, a majority of Millennials (73%) tend to focus on short-term needs and goals, such as homes and travel, believing retirement is too far away to worry about. Indeed, one quarter of Millennials with retirement accounts have dipped into them to make a large purchase, and another 32% would consider doing so. As for their approach to investments, on average, Millennials hold twice as much cash as Boomers (47% of assets vs. 20% for Boomers) — while only 29% are happy with their portfolios, compared with 78% of Baby Boomers.
Boomers typically work with a professional financial advisor, and the vast majority of Millennials are interested in working with one as well, but only one third currently do so, relying instead on family and friends. Still, three quarters of Millennials would consider using their parents’ advisor. But few are working with one yet.
As for what kinds of advice Millennials are interested in:
71% — Financial planning
70% — Investing
63% — Budgeting
61% — Insurance
60% — Mortgage
59% — Children’s college savings
55% — Debt management
Nearly three quarters (74%) of Millennials receive some form of financial assistance from their parents, and a sizeable majority (80%) of those parents said they feel good about providing financial support, while only 10% say they withhold it to teach adult children financial responsibility. However, 52% of Millennials feel shame, frustration or guilt about accepting assistance from their parents.
The financial support Millennials receive takes many forms:
29% — Health insurance
28% — Home buying/renting
26% — Auto insurance
23% — Utilities
They do also receive funding for vacations (19%) and spending money (21%), however.Future Tense?
In terms of planning their own families, Millennials are putting off marriage and children later than Boomers did, opting for adventure and life experience: 28% say they have traveled the world for six months or more, compared with 12% of Baby Boomers.
Millennials are almost twice as likely to move home after college as their parents were, and while the primary motivation for doing so is to save money, 24% of Millennials prefer to live with their parents, while 22% say their parents wanted them to stay.