By Cyril Tuohy
Members of Generation Y have fewer assets than those who belong to Generation X and the baby boom generation, but Gen Y is more likely to heed advisors and alter their savings habits, a survey from the Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF) has found.
Gen Y, Americans born between the late 1970s and early 2000, are also more apt to monitor their savings compared to Gen Xers and baby boomers, the survey also found.
“Most of us struggle with the question of how to spend less than you earn and save for the future,” said Amy Podzius, a financial consultant at TIAA-CREF. “Professional advice can help you create a budget and strategy to gain financial independence and build security.”
TIAA-CREF, one of the nation’s largest retirement funds, employs more than 445 advisors. Earlier this year, the company announced it would increase its advisor ranks by 45 percent.
Surveys show investors feel more confident and that investments often perform better after investors consult advisors. So, the results of advisors’ influence on savings habits of Gen Y shouldn’t come as much of a surprise.
Gen Yers, who tend to graduate with more student debt than any member of previous generations, can benefit from all the advice they can get. Median total debt of households headed by people under the age of 35 was $15,473 in 2010, down from $21,912 in 2007, according to the Pew Research Center.
A total of 35 percent of respondents ages 18 to 34 also said they were focused on managing student loans, compared with only 13 percent of respondents in the 34 to 44 years old category and 23 percent of respondents in the 45 to 54 years old category, the survey also found.
Having grown up in an age of personal computers and the Internet, Gen Yers are more computer-savvy and comfortable with getting financial advice online. Gen Yers are most interested in interacting with an advisor online (61 percent), as well as attending webinars (59 percent), the survey found.
Members of Gen Y are also most likely to want financial advice tailored to their needs (76 percent), with relevant tools and calculators that explain complex investment principles (72 percent), the survey also found.
The TIAA-CREF study was conducted between Aug. 28 and Sept. 2 by KRC Research. Researchers polled a random sample of 1,000 adults 18 years and older. The margin of error is plus or minus 3.1 percentage points.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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