Are Millennials ‘Financially Fragile?’

By Cassie Miller

BALTIMORE -- The rising cost of living and cost of education has changed the financial landscape for millennials. But as Matthew Greenwald and AnnMarie Pino of Greenwald & Associates discovered, there’s more for advisors to understand when it comes to millennials and financial fragility.

Greenwald and Pino led a session today at the 2019 Retirement Industry Conference, presenting recent survey results of financial behaviors and habits across five generations. Funded and made public by the Society of Actuaries, Greenwald and Pino’s research sought to compare and contrast how each generation’s habits shaped their retirement readiness and outlook.

The survey of 2,000 respondents across five generations (millennials, Generation X, early and late baby boomers and the silent generation) accounted for everything from family-related values to attitudes in an attempt to better understand each generation’s financial perspectives.

The survey yielded some surprising results when respondents were asked if they believe that their generation has had the same financial stability and outlook as their parents’ generation.

“Other generations said millennials have it harder,” Greenwald said.

Shocked by this admission from older generations, Pino said, “You hear a lot about millennials – we present a lot of data about millennials having a hard time, but I think showing that it’s not just them saying that, but others reflecting it saying, ‘compared to what I went through, it is harder’ gives some credence to a lot of the data."

Gen X also believed that they had it harder than previous generations while boomers and the silent generation said they had it easier.

Greenwald and Pino believe that this flip in outlook and stability is caused by a stage of life not yet recognized.

The stage is called “transition to adulthood.” This stage that started with the late boomers and Gen Xers has been extended over the decades and is now affecting millennials.

Factors that Greenwald says have contributed to the growth of this transition stage are:

• Lengthening life span.
• Cost of education.
• Putting off what is perceived as “adult” responsibilities (parenthood, homeownership, etc.).
• Increased difficulty entering the labor force.

Greenwald said this revelation is important for the financial services industry because it’s adding to an individual’s financial demands.

“For most of human history, there have been three stages of life and now there are six stages of life. I think that it’s important because it is the only at one stage of life that people earn money,” Greenwald said. “The other stages of life take money, which puts pressure on people.”

Greenwald and Pino believe that the financial services industry should apply these findings to their own practices.

“I think we have to increasingly recognize that people are coming in with these pressures,” Greenwald said. “And we need to adjust the guidance we give them for planning for retirement and what their goals should be.”

AdvisorNews Managing Editor Cassie Miller may be reached at [email protected]. Cassie has an extensive background in magazine writing, editing and design. Follow her on Twitter @ANCassieM.