For a majority of millennials, saving no longer has a retirement focus; it's about financial freedom.
The latest Merrill Edge Report finds that 63% of millennials were looking to achieve the amount of savings or income necessary to live their desired lifestyle, versus the 55% of baby boomers and Gen Xers who were saving for an exit strategy to leave the workforce.
In terms of their top priorities in life, 42% of millennials focused on working at their dream job, compared with 23% of older generations, and 37% on traveling the world, versus 21% of Gen Xers and boomers.
The younger cohort was much less likely than the older one to prioritize traditional life milestones, such as marriage and parenting.
What Merrill called millennials' "fear of missing out" philosophy trumped saving for their financial future. Eighty-one percent were more likely to spend money on traveling, 65% on dining out and 55% on exercising.
(Note: Millennials don't like to be called that.)
"This spring's report shows us even more differences between how millennials and their parents view and save for the future," Aron Levine, head of Merrill Edge, said in a statement.
"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."
It behooves advisors to find out who millennials are and what they want.
Convergys, an independent market research firm, conducted an online survey of 1,023 mass affluent respondents across the U.S. from March 21 to April 5. Millennials in the poll had either investable assets between $50,000 and $250,000 or an annual income of at least $50,000 and investable assets between $20,000 and $50,000. Older respondents had between $50,000 and $250,000 in investable assets.
Unprepared for 'What-Ifs'
The survey overturned a stereotype. The report found that respondents in every generation viewed their elders as superior savers.
However, when asked how much of their income they saved annually, millennials reported that they saved a much larger share than their generational counterparts, with about one in three millennials putting more than 20% of their salary toward savings goals.
