National Association of Insurance and Financial Advisors

Young Americans Are Optimistic About Their Finances But in Need of Guidance

Young Americans are optimistic about their future financial prospects. More than three-quarters of 16-to-25-year-olds in a recent Charles Schwab survey say they expect to do better financially than their parents. Some 81 percent say that they have seen their parents experience a financial hardship of some sort.
 
The optimism is a reversal of sentiments expressed in a similar Schwab survey in 2009, when many young respondents were “very concerned” about their personal financial futures.
 
While it is good that young people are thinking about their financial futures, experts warn that many may be overly optimistic. On average, the survey respondents said they expect to retire at age 60, even though trends suggest workers are remaining in the workforce longer than in the past. More than half of respondents expect to receive an inheritance from their parents, while real-life figures show that approximately 21 percent of Americans receive such inheritances.
 
Young Millennials, aged 21-25, on average have some debt and only minimal savings, according to the survey. Of the 51 percent of young Americans who say they have debt, only 3 percent say that they would pay down their debt if they were to receive a windfall of $1,000.
 
On the positive side, the 16-to-25-year-olds expressed interest in improving their financial literacy. Subjects they find most appealing include how to: meet financial goals, keep their financial information secure, prepare for a financially secure retirement, and create and manage a personal budget.
 
Their top financial goals, according to the survey, are: owning a home (81 percent), saving money to travel (76 percent), and being financially independent (75 percent).
 
Insurance and financial advisors are on the front lines, helping consumers improve their financial understanding and habits. People who work with advisors are more likely to set and achieve financial goals. NAIFA members work in communities across the country, helping clients at every career stage and income level. It’s never too early to work with an advisor to prepare for future financial security.
 
  • Posted August 15, 2018 IN


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