Millennials are overestimating their retirement readiness. They’re not using traditional financial milestones either. Owning a home and having children are no longer metrics of success.
More millennials than ever believe their finances will work themselves out.
Millennials continue favor their own happiness over traditional financial pressures and metrics.
Many millennials believe that they’ll be completely retired by the time they’re 56. Half believe that their net worth will be somewhere in the millions when they retire.
While their retirement readiness has increased recently, it still lags behind baby-boomers.
These numbers may not give the whole picture though.
Less than 40% of millennials are saving for retirement. For some, it’s because they don’t believe they’ll be able to start saving until they’re 36. Even though saving aren’t saving enough, says Fidelity.
A quarter of millennials don’t ever plan on buying a home.
Rising home costs, a desire to be closer to work, and increased transportation costs have millennials renting. In fact, millennials spend nearly $100,000 on rent before the time they turn 30.
Home ownership has traditionally been a symbol of growing up. But studies show home ownership often only makes sense if you plan on staying in the same place for a long time.
Desired Financial Freedom
The paradox of millennials’ financial outlook and priorities, such as foregoing planning for retirement and shunning traditional financial milestones, is difficult to define.
One thing is clear though—underlying these conflicting trends is a move towards a desire for independence and freedom.
When millennials seek new jobs or opportunities, more than financial gain they want the freedom to choose their hours and a stronger work/life balance than previous generations, even if it means postponing planning for their future.
Employers should focus their attention to offering benefits to employees that address their individual goals and also provide guidance to help them better plan for the years ahead.