Mon, 06 December 2021 | advice demographics
Over one-third (34%) of Millennials and Generation Z Americans say that a lack of financial guidance is inhibiting to their ability to prepare for retirement, according to a survey released today from the National Association of Personal Financial Advisors (NAPFA). Millennials reported feeling the most unprepared when it comes to their futures (38%), with about 30% of Gen Z respondents feeling unprepared.
The survey results show that more than one-third (39%) of Americans under 65 receive their financial advice online or from social media. Further, over one-fourth of Gen Z Americans receive their financial advice from social media. YouTube seems to be the most popular place for Gen Z (63%) and Millennials (71%) to discuss financial planning, while TikTok is gaining popularity with Gen Z (56%). More than 60% of the respondents who receive their information online say they have acted on that advice.
"It's great to see people enthusiastic about seeking out financial information and helping others financially succeed. The survey shows that 54% of Generation Z respondents aren't preparing financially for retirement, so if social media can pique their interest, that's a good thing," says Geoffrey Brown, CEO of NAPFA. "However, it's important to note that advice found online isn't personalized or tailored to individual goals and needs, leading to potentially greater risk-taking, consumer harm, and a piecemeal approach."
The NAPFA Consumer Survey data also reveals differences in the way generations are contributing to their nest egg. Approximately 38% of respondents use an employer-sponsored benefit like a 401(k); 24% use individual retirement accounts (IRAs); 30% invest in stocks and 19% report investing in cryptocurrencies. IRAs are less popular among younger generations. Only 22% of Millennials and 19% of Gen Z respondents claim they have investments in an IRA, while 35% of Baby Boomers and 23% of Gen X claim to have one for their investments. Alternatively, nearly 1 in 8 Millennials and Gen Z Americans are turning to micro-investing apps, such as Stash and Acorns to prepare for retirement.
For various reasons, nearly 1 in 6 of survey respondents said they feel they have "screwed up" their retirement; over 16% of those respondents believe they have screwed up their retirement by listening to unqualified financial advice. One in 5 do not have a retirement plan and have no idea when they will be able to retire. Over half of Millennials (57%) considered starting a side gig to boost their contributions to their retirement savings.
Source: NAPFA