Maybe as a sign of the challenging economic times Americans are experiencing, many younger Americans believe that financial stability is a stronger determinant of personal happiness than the person they marry, according to the latest Consumer Spending & Saving Index from Massachusetts Mutual Life Insurance Company.
“Perhaps it’s a matter of being able to control what you can control, and personal accountability for one’s financial security may be falling in that camp to a greater degree than marriage today,” said Amanda Wallace, head of insurance operations with MassMutual.
“Younger generations have already observed or experienced financial hardships in their homes and witnessed the impact on seemingly healthy relationships,” she said, adding, “So, the question may be whether or not younger people are placing higher priority on securing their finances before marriage, or if they are having a vision of independence and self-reliance in their future.”
Actions to achieve personal happiness
Despite younger people’s conviction that financial stability is essential to their personal happiness, the survey reveals that many are not practicing what they preach:
Nearly half (49%) say they are not saving enough to retire at their ideal age:
Gen Z: 45%
Gen X: 53%
Baby Boomers: 32%
Over a third with student loan debt used funds earmarked to pay down their debt to purchase consumer goods during the pause in federal student loan payments.
Moving towards financial stability
So, what can young people do to strengthen their finances, enhance their financial future, and improve personal happiness?
“Investing in yourself through wise financial choices today is a commitment younger people can make to secure a more stable financial future,” said Paul LaPiana, head of MassMutual brand, product and affiliated distribution.
“As with most healthy habits, consistency is key,” LaPiana said. “Good financial habits include saving and spending responsibly starting at a young age, increasing retirement contributions, and broadening your investment portfolio to unlock a financially secure and prosperous future.”
Securing a sound financial future also takes planning and preparation, added Wallace. “And a financial advisor can help build and protect the wealth of a couple individually, and as a family unit, through planning and a combination of investments and risk-management tools.”
Additional survey findings
The survey featured more findings related to consumers’ financial outlook, views, and behavior in a changing economic environment.
Among those findings:
1. Retirement Plans: Nearly half of Americans planning for retirement are behind where they need to be to retire at their ideal retirement age (49%).
More men (52%) report being behind on their retirement savings than women (44%).
Two thirds believe that the ideal retirement age is between 60 and 69, with over half expecting to retire around that age (53%) and 20% not ever planning to retire.
Among retired Americans:
43% say that their retirement savings are about what they need
21% say that they have more than they need
29% say they have less than they need
2. Financial Advice: Millennials are as likely to have taken financial advice from a source on a social media platform in the last three months as they are to have ever met with a financial advisor.
Nearly one third of Millennials (31%) and Gen Z (32%) say they have followed financial advice from social media in the last three months.
Also, 31% of Millennials and just 21% of Gen Z say they have met with a financial advisor in the past, compared with 58% of Baby Boomers and 57% of the Silent Generation.
Among those who say they have followed financial advice from social media in the last three months, the most common sources are:
3. Holiday Spending Plans: Americans may be tightening their budgets for the upcoming holiday season, with 80% expecting to spend either the same amount or less than they did last year (vs. 76% in Q3 2022).
4. Next Year’s Outlook: Looking at next year, Americans are slightly less concerned about a recession and have mixed feelings about how the U.S. political climate and the 2024 presidential election will impact their finances.
The index was commissioned by MassMutual, and the research was conducted online by PSB Insights from August 5- 21, 2023, among 1,000 U.S. adults (ages 18+). Research was also conducted with an additional sample of 500 adult Massachusetts residents from August 5-28, 2023.
Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at amseka@INNfeedback.com.
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