The new wine is dying on the vine.
Younger respondents in a recent survey sponsored by Boston-based MFS Investment Management reported that they were highly likely to avoid decisions like career changes, home purchases, moving and household formation because of financial stress, even as they approach middle age.
According to the “2017 MFS Heritage Planning Survey,” 80 percent of millennials, defined as those age 21 to 36, have either delayed or said that they expect to delay a major life event. Already, nearly a quarter of millennials have delayed having children and purchasing a home.
Overall, six in 10 of the survey’s respondents said that they have delayed or will delay a major life event because of their current financial situation.
The dark clouds of negative sentiment seem to swirl most around the heads of Generation X investors aged 37 to 51, 70 percent of whom said that they would have to delay a life event or have already delayed a life event for financial reasons. Only one-third of Generation X investors reported confidence in their ability to address financial concerns as they arise.
MFS posits that Generation X pessimism stems from a particular generational problem: They are sandwiched between aging parents they must care for and children they must raise.
Millennials are less pessimistic, but MFS argues that their confidence may be misplaced. Most of them, approximately 70 percent, said that their financial situation will improve over the next three years, and 50 percent believe they will be able to meet their long-term financial goals.
Nearly 40 percent of millennials claim that they are highly knowledgeable when it comes to investing, according to the survey, and 70 percent of them invest to grow their assets and generate income. Yet more than one-third of millennial respondents’ assets were in certificates of deposit and cash, asset classes unlikely to generate significant growth or income.
The specter of health-care costs is weighing heavily on investor sentiment, too: Two-thirds of the survey’s respondents said that rising health-care costs are among their top concerns for the next three years. Their other major near-term concerns include the U.S. budget deficit (named by half of the respondents), Social Security benefits and a market downturn.
Baby boomers, those aged 52 to 70, tended to be more concerned about health-care costs, while millennials and Gen X investors tended to be more concerned about saving for retirement, according to MFS.