Millennials Challenges Planners

The youngest generation in today’s workforce was raised by the latchkey generation and by Baby Boomers who delayed parenthood.

The family was much more “child centric.” Parents scheduled their kids in activities, protected them from dangers (both real and exaggerated), and praised them to build their self-esteem.

Because of cell and other technology, they can get advice from Mom and Dad practically 24/7. They have a very different relationship with their parents than did older generations and often involve their parents in work-related decisions.

Understanding difference enables us to move from judgment to acceptance and choice.

Providing Choices

Financial Planners have had to adjust planning strategies as they plan thru generations. This is because money personalities are different.

• Traditionalists: 1922 ‐ 1945:  Put it away – Pay cash
• Baby Boomers: 1946 ‐ 1964: Buy Now…Pay Later
• Generation X:  1965 ‐ 1980: Cautious Conservative…Save, Save, Save
• Millennials: (Gen Y) 1981‐ present:  Earn To Spend

Marriage and Parenting

A Pew Research Center analysis of attitudinal surveys reveals that it’s a little more complicated than we thought. Throughout history, marriage and parenthood have been linked milestones on the journey to adulthood. The was the roadmap for Financial Planners as a whole. But for the young adults of Generation Y, also known as the Millennial Generation, these social institutions are becoming delinked and differently valued.

Today's 18- to 29-year-olds value parenthood far more than marriage, according to a new Pew Research Center analysis of attitudinal surveys. A 2010 Pew Research survey found that:

• 52% of Millennials say being a good parent is "one of the most important things" in life.
• Just 30% say the same about having a successful marriage -- meaning there is a 22-percentage-point gap in the way Millennials value parenthood over marriage.

The Pew Research surveys also find that Millennials are less likely than adults ages 30 and older to say that a child needs a home with both a father and mother to grow up happily and that single parenthood and unmarried couple parenthood are bad for society.

Slow to Marry

In many… but not all, these attitudinal changes mirror behavioral changes. Young adults today are slower to marry than were their counterparts in older generations. Just 22% of Millennials are currently married.

• The delay in marriage among today's young adults has been accompanied by a corresponding increase in the rate of out-of-wedlock births.
• Just over half (51%) of all births among Millennials in 2008 were to unwed mothers, compared with just under four-in-ten (39%) among Gen Xers in 1997, when they were the same age that Millennials are now.
• Even though their generation has been slow to marry and have children, most Millennials look forward to doing both.

However, the overall incidence of parenthood among young adults has declined. In 2010, 36% of women ages 18 to 29 had ever had children; in 1998, that figure was 41%.

Linking Marriage and Parenthood
Millennials are less likely than older generations to link marriage with parenthood. About a third of Millennials (34%) think that more unmarried couples raising children is a bad thing for society, compared with 45% of those ages 30 and older.
In addition, Millennials and Gen Xers are less likely than older generations to say that a child needs a home with both a father and a mother present to grow up happily. Only a slim majority of Millennials (53%) and Gen Xers (57%) say this, compared with three-quarters of adults who are ages 65 years or older.

First DINKY…now SILK

During the 1980s…the term DINKY (Dual (or double) Income, No Kids. was coined and was used in the UK, Canada, India, and China to describe a high-earning couple who choose not to have children and are therefore able to afford a more expensive consumer lifestyle than those with families. DINK was and is still used in reference to gay and lesbian couples who are childless. So now...lets coin a new term "SILK"…Single Income Living with Kids.

Millennials Challenge Values of Financial Planners

Financial Services Professionals will increasingly encounter one parent household with children.

• The good news is that they are not all welfare cases. Many of these household have adequate buying power.
• Financial planning and not just selling a product will be in great demand as these households will welcome guidance and advice on building, protecting and managing wealth.
• Financial advice will be the key to robust survivorship planning in the event of a disability or premature death of the single parents.

Sources:

1. For Millennials, Parenthood Trumps Marriage by Wendy Wang, Research Associate, and Paul Taylor, Director, Pew Social & Demographic Trends Project |March 9, 2011
2. New Study Shows How Different Generations Use Facebook Jul 30, 2009 – Now, a new study from Anderson Analytics shows how different generations are using social networking sites like Facebook, MySpace, Twitter http://www.insidefacebook.com/2009/07/30/new-study-shows-how-different-generations-use-facebook/
3. Mixing and Managing Four Generations of Employee |www.fdu.edu/newspubs/magazine/05ws/generations.htm

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Jim Robinson posted on Thursday, July 21, 2011

Tags: Wealth Transfer, Estate Planning, Generations, Gen X, Gen Y, Baby Boomers, Millennial

Posted in: Site News, The Practice

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