Aging & Planning

Planning Through The Ages

How different generations are approaching financial planning today;
Millennials show the most optimism about their finances

by Kelly LaVigne

Mr. LaVigne is vice president of Advanced Markets, Allianz Life Insurance Company of North America. Visit

We all know that generational attitudes among Americans differ on many levels. But one thing most Americans can agree on is that they generally feel good about their financial situation as we start 2019. Fewer Americans are troubled about financial issues such as stagnant wages and job security than they were last year, according to the Allianz Life 2018 New Year’s Resolution Study

While this optimism is good news, it does present an interesting potential problem. This increased confidence could be one of the reasons that fewer people actually plan to focus on achieving financial stability this year, which is down across the board for all generations. The lack of attention could create adverse effects, particularly as the market is on an epic roller coaster ride.

So how can financial professionals help clients who might be making financial stability less of a priority this year? Here’s a deeper dive into how each generation is approaching financial planning next year, and how you can help address some of their unique pain points.

Millennials leading the charge

While many Americans are feeling good about their finances, millennials (those aged 18-34) are showing the most optimism in the new year. Fewer than one-third (29 percent) list stagnant wages as one of their most worrisome threats of 2018 versus 37 percent last year. Even less (24 percent) say job security is one of their top concerns versus 37 percent in 2017.

However, financial stability decreased slightly as a focus for millennials, with 29 percent listing it as their top focus going into 2019 versus 31 percent who noted it as their top focus for last year. This could perhaps be due to the fact that they are feeling confident in their job security and wage growth. It’s important to find a way to remind them that just because they are feeling good about their finances this year doesn’t mean they should completely ignore steps to help achieve or maintain financial stability in 2019.

Millennials are also making the most progress on kicking some of their worst financial habits. Fewer reported that they are spending too much, and a smaller group say they are having issues with not saving any money this year compared to the 32 percent who listed it as their worst financial habit a year ago.

While they are less focused on achieving financial stability in the next 365 days, millennials are also more likely to be seeking the advice of a financial professional. As this age group continues to make solid gains in their career paths – in terms of both job stability and increased wages – they may be looking for guidance on what to do with their increasing wealth, and will become a growing market for financial professionals to tap into. Opportunity to better serve this generation abounds. Are you ready?

Breaking bad habits

When it comes to bad financial habits, baby boomers (ages 55+) are the mostly likely to say that they don’t actually have any. Yet more boomers also say they are not saving as much as they could this year, compared with their saving habits last year.

While its commendable that they feel they are doing a good job managing bad financial habits, boomers might have their blinders on. The ‘instant gratification” generation has not suddenly changed its ways. There is always room for small tweaks to improve saving and spending habits – whether by revisiting monthly budgets to find additional opportunities for cutting back, or boosting contributions to retirement accounts.

Unfortunately, Gen Xers (age 35-54) seem to be making the least progress against breaking their bad habits. More say they are spending too much money on things they don’t need, not paying down debts fast enough, and that they aren’t saving as much as they should, compared with those numbers last year. This is concerning, as this age group also had the biggest drop in the number of people saying that they are planning on focusing in financial stability next year (36 percent last year versus 28 percent this year). Zero in on these bad habits with Gen X clients, and discuss why they might be losing focus on good financial fitness.

For example, older Gen Xers are starting to make a decent salary after years of living on the edge. In addition, their kids might be getting ready to graduate college, which means tuition payments are ending, and they have more time for themselves. In that case, it’s easy to understand the mindset they may have around being able to finally enjoy themselves. However, is imperative to not overdo it, and try to get them back on track

The role of the financial professional

After the wild stock market ride that was 2018, it might be surprising to some that many people are feeling so confident about 2019, and choosing to focus less on their finances over the next year. In addition, fewer people think the United States will enter a major recession next year. And that is after one of the most volatile years in the stock market on record!
But as a financial professional, it’s always good to provide a balanced reality check, and remind them that just because they feel things are going well, doesn’t mean they can take their eye off the ball.

Taking a look into how each major generation is thinking about their finances can allow you to make connections with clients on a deeper level. It can also provide a view into intergenerational family finances. Boomer clients can take a cue from their millennial children, or help encourage Gen X children to improve their financial habits.

These differences in attitudes also point to the need for more tailored financial planning that can address both the positives and negatives reflected among each group. Take these differences into consideration when meeting with clients in the first few months of the year. While it’s an ideal time to walk through their specific financial situation and discuss both short- and long-term goals, having a lens on their unique mindsets can better position you to help set them up for success, not just for the coming year but for years to come. ◊

*Allianz Life Insurance Company of North America conducted an online survey, the 2018 Allianz Life New Year’s Resolution Study, in November 2018 with a nationally representative sample of 1,278 respondents ages 18 years or older.