Allianz says this may be why millennials seem to be more interested in volunteer and environmental work, pursuing creative careers and working fewer hours but for more years than their elders.
But Allianz also says that millennials lack the resources to pursue their nontraditional lifepaths, noting that they have the least saved for retirement, the weakest assets, the lowest rates of home ownership and the highest debt among the three generations it surveyed.
“It takes money to have flexibility,” Libbe says. “Millennials, as a generation, are not there yet. They’re creative and capable and know what they want, but most of them are still just trying to pay the rent.”
Money is the biggest barrier to planning for millennial goals, according to Allianz, and the respondents agreed. Almost two-thirds of millennials, 63 percent, said that worries about money was the top thing that prevented them from taking a different approach to when and how they learn, work, couple and raise kids, compared to 59 percent of Gen Xers and 56 percent of boomers. A higher percentage of millennials, 81 percent, also said that money was the top factor that prevented them from making alternative choices in their lives, versus 78 percent of Gen Xers and 78 percent of boomers.
Millennials are also afraid of being judged by others, putting more stock into what others think, moreso than other generations, according to Allianz, which has repercussions for their financial lives.
“Millennials were twice as likely to fear being judged as baby boomers,” Libbe says. “They really care about the opinions of other people, and this leads to a lack of confidence.”
Low confidence is petrifying millennial decision-making, says Libbe: Almost one-in-three millennials say they don’t know how to begin preparing for their retirement, versus 24 percent of Gen X respondents and 14 percent of boomers.
When confronted with the possibility that they may live to or beyond age 100, millennials’ top two response were “I better save more money” and “I better get serious about financial planning.”
“The advisory profession is going to have to evolve to where they help people to be able to envision how their lives are going to unfold,” Libbe says. “It’s not too much to ask. The whole industry has had to evolve from thinking that advising was simply stock trading to portfolio management, then asset allocation, and now to goals-based planning. Life planning means expanding what we think of as financial goals.”
For the Allianz study, Larson Research + Strategy interviewed 3,000 U.S. adults via an online survey in March.