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Millennials With Stockpiles of Cash Are Looking for Advice: New York Life

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What You Need to Know

  • Deferred student loans, fewer daily expenses and forgoing leases to move in with parents during the pandemic allowed a third of millennials to build a nest egg.
  • Fifty-three percent of Gen Zers and 51% of millennials said they were more likely to get help from a financial professional.
  • Despite their savings and willingness to consult an advisor, most millennials lack confidence regarding how to achieve their financial goals.

Thanks to deferred student loans during the pandemic, fewer daily expenses and forgoing leases to move in with their parents, 29% of millennials in a poll released Tuesday by New York Life report that they have built a nest egg, saving an average of $4,241.21. Moreover, more millennials now say they are open to guidance from a financial professional. 

According to the poll results, the slowdown in costs was the primary driver of increased savings among younger generations, with 61% of millennials experiencing pandemic-related deferred expenses. 

Of this group, 48% of millennials were able to save toward their financial goals over the past 18 months, compared with 45% of baby boomers and 41% of Generation Xers. 

“Millennials, while relatively early in their careers, have already had to face two financial shocks in their lifetimes: the 2008 recession and now the COVID-19 pandemic,” Aaron Ball, head of insurance solutions, service and marketing at New York Life, said in a statement. 

“While some of the deferred expenses are starting to return, younger generations have had a rare opportunity to consider their financial position and began to establish nest eggs. I’m encouraged by the degree of financial self-care and openness to hands-on professional guidance as this group begins to plan for major life events.” 

The online poll was conducted in early September among a national sample of 2,300 adults. 

Open to Advice

As a result of the paused expenses and savings, younger generations are more focused on their finances, with 58% respondents saying they are thinking about their finances more this year than they did last year. 

Across generations, the top three long-term financial goals they reported were building emergency funds, paying off credit card debt, and being on track to retire at their desired age. 

Because of this focus on achieving financial goals, in tandem with increased savings, 53% of Gen Zers and 51% of millennials said their nest-egg savings had made them more likely to consider getting help from a financial professional, compared with just 33% of all adults in the poll. 

Despite their newfound savings and willingness to work with a financial professional, the majority of millennials lack confidence in knowing how to achieve their financial goals, the poll found. 

More on this topic

Asked how best to describe their financial strategy, only 22% of millennials said they “absolutely” know what they are doing and 41% said they “somewhat” know what they are doing, compared with 13% of Gen Zers who absolutely know and 37% who somewhat know. 

“As Millennials and Gen Zers begin to reach financial and personal milestones, having the help of a trusted professional can help them feel more confident about their financial outlook, knowing they have an expert helping them adjust their financial priorities as expenses resume and the day-to-day routine may begin to shift,” Ball said. 

Emerging Trends

As Americans face the ongoing effects of the pandemic, several trends emerged from the findings of the New York Life poll. 

Millennials were nearly twice as confident as Gen Zers that their retirement savings would last for the rest of their life. At the same time, both cohorts said they felt less prepared than all adults in the poll for a financial emergency.

Male respondents said they felt more prepared for a financial emergency than their peers at a higher rate than all adults, and expressed more confidence than female respondents that their retirement savings would carry them through life.

Among respondents who said they had experienced saving because of pandemic-paused costs, the amount saved averaged $5,212.34 over the past year and a half. Boomers and Gen Xers in this group fared better in saving than younger generations, saving an average of $5,767.55 and $6,076.35. 

Millennials saved an average of just $284.35 more than Gen Zers, who amassed $3,956.86. 

Nineteen percent of all respondents said they are anticipating resumed or increased mortgage and rent costs; they expect to spend an average of $1,410.68 a month on rent and mortgage payments. 

Eleven percent are anticipating resumed or increased student loan costs, expecting to spend an average of $483.70 a month paying off student debt. And 18% anticipate increased costs when child care resumes, an average of $764.23 a month.