Young Americans not yet saving for retirement, they have other priorities for their dollars

The youngest cohort of American adults are already talking about retirement but are not ready to start saving for it because they have other financial priorities.

That’s one of the key takeaways from new research from Edward Jones which found that 18-34-year-olds have their eye on retirement at 61, three years younger than those aged 35-64 are planning.

But GenNext clients want to focus their finances on some other life milestones that typically come way before stopping work. Planning for a family is the client priority reported by 30% of advisors who took part in the poll, followed by being responsible with everyday expenses (28%), and investing (23%).

It also seems that a significant share of young Americans working with financial advisors are doing OK with their finances despite current challenges, with 42% of advisors saying that their emerging adult clients are thriving and, compared to research from a decade ago, the 18-34 age group is more financially stable.

DOING IT THEIR WAY

Younger generations are keen to do things their own way, which may raise a few eyebrows with older advisors, but the research aims to help shape effective advisor-client conversations.

"We know from our research with emerging adults ages 18-34 that they want to be comfortable or have enough money to have a meaningful life, but they aren't concerned with financial accumulation or career in the same way," said Julia Bartak, an Edward Jones financial advisor in the Kansas City area. "This means financial advisors will have very different conversations with GenNext clients about comprehensive planning and advice, including budgeting, saving for a big purchase or achieving other short- and long-term financial goals."

The latest survey follows previous Edward Jones research which revealed that 68% of GenNext don’t think they have enough income or savings for professional financial advice.

With many GenNext clients experiencing or aspiring to experience traditional life events such as marriage, home ownership, or eight in ten who have or want children, there is an opportunity for financial advisors to help clients set long-term goals as they juggle jobs, school, gig work and more.