NEW YORK: American millennials are the first generation to plan for the future in terms of travel, dining out and exercise, rather than merely saving for retirement, according to new research.
Merrill Edge, part of Bank of America's retail banking division, surveyed over 1,000 'mass affluent Americans' with investable assets between $50,000 and $250,000, aged 18-34 or aged 35-plus and identified financial freedom as the primary aim of millennials.
Figures showed that 63% of this demographic aim to acquire the money necessary to live a desirable lifestyle, Research Live reported, unlike the Gen X and Baby Boomer respondents, 55% of whom were saving for retirement.
"Everywhere we look, millennials continue to redefine life priorities and normalize new and different behaviours," said Aron Levine, head of Merrill Edge.
Among these, millennial respondents were more likely to prioritize personal milestones over traditional life milestones: 42% said they would focus on working at their dream job, compared with 23% of the other age-groups, and 37% (compared with 21% of others) wanted to concentrate on travelling the world.
While 51% of the older respondents agreed that they would prioritize getting married, only 43% of millennials concurred; and just 36% of millennials said they would prioritize being a parent – a significant departure from the 59% of older respondents.
Freedom and flexibility are the goal for young adults, Levine said – "they are willing to do whatever it takes, even if it means working for the rest of their lives".
But that will require not only "a hands-on, goals-based approach to their long-term finances" but that they "prioritize saving in the short term".
Furthermore, the report found that the 'fear of missing out' (FOMO) was a key driver of the age group focus on individual goals.
However, Levine also observed that Americans overall are struggling to save, with many saving less than 10% of their salaries – the issue, he said, "is compounded by the fact that many are not prepared for life's 'what-if' moments".
Most millennial respondents admitted that events such as a divorce, having children, or living to 100 would "cripple their financial goals."
Data sourced from Merrill Edge, Research Live; additional content by WARC staff