Millennials are saving to have financial freedom at a faster rate than Gen Xers and baby boomers, who are more focused on saving to exit the workforce.
That’s according to the latest Merrill Edge report, which polled more than 1,000 mass affluent Americans to get a sense of their spending and savings plans. The survey showed 63 percent of millennials are looking to achieve the amount of savings or income necessary to live their desired lifestyle, which drastically differs from most (55 percent) Gen Xers and baby boomers, who are saving to leave the workforce.
According to a press release highlighting the results of the survey, Merrill Edge said when respondents were asked about the top priorities in life, millennials were significantly more likely than their older counterparts to focus on personal milestones of working at their dream job (42 percent, compared to 23 percent) and traveling the world (37 percent, compared to 21 percent). What’s more, they are far less likely to put traditional milestones — like getting married and being a parent — at the top of their lists.
“This spring’s report shows us even more differences between how millennials and their parents view and save for the future,” said Aron Levine, head of Merrill Edge, in the press release. “Young adults tell us they are willing to do whatever it takes to achieve freedom and flexibility, even if it means working for the rest of their lives. To ensure success, it’s increasingly important these younger generations take a hands-on, goals-based approach to their long-term finances and prioritize saving in the short term.”
Merrill found that millennials’ fear of missing out philosophy impacts their spending habits, with 81 percent of survey respondents saying they are more apt to spend their money on traveling, dining out and exercising than saving for their financial future.
In the case of using technology for investing, two in five Americans said they use an online service to make and manage their investments, while one in eight are currently using a robo advisor or may do so during the course of the next few years.
The percentage increases to 22 percent when asking millennials. Two in five Americans say they make and manage their investments through an online or mobile portal. One in eight Americans are currently using a robo advisor or would consider doing so in the next year. Overall, respondents cite the ability to invest via mobile makes them feel knowledgeable (51 percent), empowered (31 percent) and savvy (14 percent).