Nearly half of affluent Millennials think they will be forced to work beyond retirement age according to findings from a new survey, released Oct. 2 by Investopedia.
While Millennials see investing as the primary vehicle for saving for the future, they also find it overwhelming and intimidating, the survey found. However, those who learn about investing at an early age are more likely to feel confident about their own financial decisions.
Investopedia partnered with Chirp Research to conduct the nationwide survey of affluent Millennials (a population with the means to invest, with an average HHI of$132,000) to understand their investment goals, retirement plans, and the barriers to investing.
“This is the first generation that entered their professional lives in the wake of the 2008 financial crisis,” said Caleb Silver, Investopedia Editor in Chief. “Despite financial technology becoming readily accessible to them, many still feel that they lack enough financial and investing knowledge to get started.”
Other key findings from the study:
Investing seen as overwhelming and intimidating
- 36% agree they should be investing more.
- When asked what positive terms they associate with investing, their top choices were: smart (40%), necessary (34%), responsible (35%). The financial crisis hasn’t turned this generation against the stock market.
- But the barriers were clear, as the top negative terms were: risky (37%), intimidating (26%), and overwhelming (24%).
- Sophia Bera, CFP, of Gen Y Planning says as part of the survey report that she would tell a Millennial hesitant to invest in stocks that “you’re probably already invested in stocks if you participate in your work 401k plan. It’s important to have different buckets of money to serve different goals.”
Financial education driving investment behavior
- Early education has an impact: affluent Millennials who learned about investing before they were 15 were more than two times more likely to feel knowledgeable about the topic (37% vs. 16%).
- Those that feel more knowledgeable about investing were five times more likely to feel very confident in their ability to make their own financial decisions (73% vs. 14%) and were nearly four times more likely to manage their investments daily or weekly (78% vs. 20%).
Financial advisors a trusted source of education
- 37% of affluent Millennials describe investing as “risky,” and nearly half (43%) have a financial advisor.
- Financial advisors are the No. 1 trusted source for financial advice among affluent Millennials; more than books, TV shows, newspapers, podcasts/radio, magazines, websites, or YouTube.
- Those who have a financial advisor are twice as likely to report better investment performance.
“The survey paints a picture of a generation that is trying to tackle planning for the long term while perceiving investing as risky, all despite having the funds to invest. Critically, the single factor in this study that best predicted being invested—and achieving better results—was financial education. This represents a huge opportunity to better support Millennial consumers in their financial journey,” said Dr.Joetta Gobell, Vice President of Research and Insights at Dotdash, Investopedia’s parent company.
To learn more about the study, click here.