Gen Y is most hungry for high-tech tools, but majority turn to family and friends for advice 2013
NEW YORK–(BUSINESS WIRE)–A majority of young adults surveyed change their savings and spending habits after seeking financial advice, despite the competing pressures of student loan debt and under-employment, according to a recent survey from TIAA-CREF. The survey was conducted by an independent research firm and polled a random sample of 1,000 adults nationwide on their attitudes, preferences and behaviors about receiving financial advice.1
Known as Millennials or Gen Y, American adults younger than age 34 are most likely to monitor savings more closely (71 percent) or change their spending habits (66 percent) after getting financial advice, compared with their older cohorts as well as surveyed Americans overall.
“Most of us struggle with the question of how to spend less than you earn and save for the future,” said Amy Podzius, a financial consultant at TIAA-CREF. “Professional advice can help you create a budget and strategy to gain financial independence and build security.
Start early… and invest often
“It’s important to remember that an early start can significantly help you save more over the long term,” added Podzius. For example, for every 10 years you delay saving, you’ll need to save three times as much to catch up. If you contribute $1,000 per year into an IRA every year from age 20 to age 30, and contribute no more, at a 7% average annual return, your account will be worth $168,515 at age 65. Starting at age 30, you would need to contribute $1,000 per year for 35 years at the same average return to reach an account value of $147,914 at age 65.2 If money is tight, setting aside even small amounts now will likely reap large rewards over time.
When it comes to financial planning, Gen Y is most interested in interacting with an advisor online (61 percent), as well as attending webinars (59 percent) and live seminars (58 percent), compared with surveyed Americans overall (45 percent, 47 percent and 46 percent, respectively). Gen Y members also are most likely to want financial advice designed specifically for their needs (76 percent), with relevant tools and calculators that break down complex advice principals (72 percent).
The survey results demonstrates that Gen Y adapts to broad technology changes but places trust more narrowly: Seventy percent of Gen Y advice seekers rely on friends and family for financial advice, while Gen X advice seekers rely more on financial service provider websites or online tools (55 percent).
“When we talk about the top 10 mistakes people make, running up debt is only part of the picture. There also is a tendency to leave money on the table by not taking full advantage of retirement plan contribution matches offered by many employers,” Podzius said. “TIAA-CREF provides personalized advice on the plan’s investment options and financial planning tools for every stage of life, which can empower young adults to take charge on their own terms, whether it’s building a five-figure savings account or changing the repayment terms for student loans.”3
For details on the study, read the TIAA-CREF Financial Advice Survey Executive Summary. For more information about retirement planning, visit theTIAA-CREF Advice and Guidance Center.
Survey Methodology
The survey was conducted by KRC Research by phone among a national random sample of 1,000 adults, age 18 years and older, between August 28, 2013, and September 2, 2013. The margin of error for the entire sample is plus or minus 3.1 percentage points.
About TIAA-CREF
TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with $542 billion in total assets under management (as of 9/30/2013) and is the leading provider of retirement services in the academic, research, medical and cultural fields.
TIAA-CREF Individual & Institutional Services, LLC, and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.
The material is for informational purposes only and should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons. Past performance does not guarantee future results.
Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value.
© 2013 Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF), 730 Third Avenue, New York, NY 10017
1 28 percent of the sample base of 1,000 was between the ages of 18-34.
2 Savings Fitness: A Guide to Your Money and Your Financial Future, United States Department of Labor, October 2010,http://www.dol.gov/ebsa/pdf/savingsfitness.pdf
3 These statistics are meant to reflect customer satisfaction with brokerage services provided through TIAA-CREF Financial Consultants. It does not apply to any investment advisor services offered through TIAA-CREF Individual & Institutional Services, LLC as a registered investment advisor, or to the investment adviser representatives that provide such services. Results experienced may not be typical of all participants, and are not indicative of future performance or success. Individual results will vary.