Yet there is a growing appetite for financial planning and educational resourcesLincoln Financial Group’s September COVID-19 Consumer Sentiment Tracker found younger demographics are facing increasing financial and job security pressures in the wake of COVID-19. Access report here.
23 October 2020 — The financial consequences of the pandemic are impacting every generation — but younger Americans are being hit the hardest, according to Lincoln Financial Group’s September COVID-19 Consumer Sentiment Tracker. Millennials are especially worried about making ends meet and not having enough “know-how” to manage their finances.
Whereas Boomers and Gen X are more concerned about protecting their investments and retirement savings respectively, the study found younger demographics are facing increasing financial and job security pressures in the wake of COVID-19. As a result, Millennials’ greatest concerns are not having enough emergency savings (43%), not being able to cover basic expenses (37%) and lost income due to layoffs and other issues (32%).
“It can be difficult for consumers to balance immediate financial obligations, like paying the electric bill and buying groceries, with planning for their financial future,” said Jamie Ohl, executive vice president and president, Retirement Plan Services for Lincoln Financial Group. “Creating a financial plan with the help of a professional can help them manage these competing priorities, so they’re not sacrificing their financial tomorrow, today.”
A Growing Appetite for Financial Planning
The current economic environment is prompting more younger Americans to think about planning for their financial future. The research found roughly half of Gen Z and Millennials say they are thinking more often about financial planning compared to only 29% of Boomers.
The Millennial mindset is most affected by the events of recent months — with more agreeing that they are thinking about and planning for the future differently as a direct result of the pandemic, a fact evidenced by their responses to the statements below:
- I am planning to make permanent changes to the way I spend and save money as a direct result of what I have experienced during the COVID-19 crisis (84%).
- I am thinking differently about my employer during the COVID-19 crisis (84%).
- I am thinking differently about planning for my financial future as a result of the COVID-19 crisis (88%).
“It’s important for all of us to remember that a financial crisis can hit at any time,” said Ohl. “It’s never too late to take steps like starting to save for retirement, making a budget or talking to your employer about how you can make the most of the benefits you’re offered at work.”
The Crisis Drives a Behavior Change
According to the study, Boomers (42%) are the least likely to have taken any financial actions as a result of COVID-19, but hard-hit Millennials are responding to job losses and insecurity, with nearly nine in 10 indicating they have taken some financial action related to the pandemic’s impact.
One of those actions is doing their research — 18% have researched insurance products like life, health and auto. And, Millennials are the demographic most likely to report they contacted a financial professional for the first time. As a result, Millennials surpass Boomers and Gen X when it comes to having bought life insurance (16%), an annuity (16%) or long-term care insurance (17%).
“Our goal is to help educate people of all ages about financial planning and retirement, so they can feel empowered to take charge of their financial futures,” said Ohl.
Visit www.lincolnfinancial.com for more information, tools and resources to start your financial plan.