The so called Millennial generation were born during the period spanning the 1980’s to round about the turn of the century. They are also often referred to as GenY’s or the iGeneration. These children were brought up to believe that the world was their oyster, full of endless opportunities and a bright rewarding future. Their parents were in the most part financially stable and the children received a protected and privileged upbringing. Life to Millennial children is about having fun and experiencing the amazing opportunities that this world has to offer.
Their attitude to savings and investments is very different to that of their parents and grandparents. Their life expectancy will also be longer than that of the generations that preceded them. Unfortunately, research has shown that many Millennials think, that for them, retirement will be a cakewalk. They had better think again!
For one thing, retirement at 65 will at best be a pipedream. Realistic retirement savings normally only kick in at about 30 years of age. Before then it is paying off student debt, saving for a home and travelling. Very few Millennial couples will be able to save enough capital in 35 years, that will be necessary to fund a healthy vibrant retirement, that is likely to last another 35 years, to when they are well into their 90’s.
A study about Millennials living in the USA and their retirement plans that appeared in a recent CNBC article makes for fascinating reading. The study found that 15% of Millennials believed that winning the lottery was a viable retirement strategy, while 11% expected to be “gifted” money by way of an inheritance that would be sufficient to fund their retirement.
All in all, the current retirement experience of the older Silent generation, and the envisaged retirement experience for the Boomer generation currently retiring, will be vastly different to the retirement experience that the Millennial generation are likely to experience in the future. It should not be an automatic assumption that this Millennial generation will be in financially viable place to experience retirement as a lifestyle choice at all. That is not to say that Millennial’s should ignore investing or saving, but their investment strategies and objectives may not be solely direct towards retirement planning. It is vitally important for this generation to understand the reality that awaits them and to have a strategy that is suited to their investment objectives. Taking professional advice as opposed to hoping for a lottery win, may very well prove to be a good plan of action.
Contact Tony to set up an appointment to discuss a personal investment strategy that is suited to your unique needs and circumstances.