There’s a big disconnect between many who work in the world of “savings” and many who work in the world of “beer money”.
Hell – even the CEO and Chairman of Aetna, Mark Bertolini, finally gets it. During an interview with Bloomberg at The Year Ahead Summit, he reflected on what millennials are choosing over insurance.
“The healthier people pull out, because the out-of-pocket costs aren’t worth it. I mean, young people can do the math, gas for the car, beer on Fridays and Saturdays, health insurance. Everybody’s immortal at that age. And so, it’s very difficult to get people into the exchanges.”
It’s not just insurance. It’s retirement. And it’s in large part because millennials just aren’t focused on the same thing their parents were focused on.
In the 2016 Prudential Challenge Quiz, 56% of adults said they’re unable to picture themselves when they’re older. And that means they’re focused on the near-term and living in the moment now.
The numbers ring true at scale.
Many millennials say they aren’t going to start saving for retirement until they’ve paid off their student loan debt….and a third of recent graduates say they plan on living with mom and dad after graduation to work on those college loans.
Think about it – that slows down the whole “life” process. Getting married. Buying a home. Having kids. Saving for retirement. And the student loans are just growing and growing – creating not just an unsustainable cycle of debt, but contributing to much smaller levels of investing among this demographic.
Check this one out. According to The Insured Retirement Institute and The Center For Generational Kinetics, almost 25% of millennials think they’re going to bankroll their retirement from either financial gifts or the lottery. (Perhaps that explains why so many tender snowflakes are such huge Bernie Sanders fans).
The good news is that research shows millennials are saving at a younger age than their parents – around age 22, which is about five years earlier on average than their parents.
But there are a few things to note here:
First, many of them saw their parents lose their retirement in the market collapse nearly a decade ago.
Second, millennials have seen a massively shrinking number of jobs offering pensions – but the reality of it is that few would even qualify for pensions, given how quickly most millennials tend to turn through jobs and careers now.
For companies looking to educate millennials on the need to invest, it’s not overly complicated.
1) Help them to build a plan into their lifestyle that fits their current lifestyle.
2) Sell them on the value of how it will impact them in the future by using real life examples and helping them to envision where they will be down the road.
3) Don’t overly complicate the process. Millennials don’t like feeling or looking dumb (does anyone?) but research shows that many will choose not to continue forward on a path INSTEAD of asking questions, simply to avoid looking uneducated.
And at the meeting, don’t forget the beer. We love our craft beers.
Kyle Reyes is the Chief Executive Officer of The Silent Partner Marketing, a boutique digital design and execution marketing agency. Previously he held marketing director roles for automotive and hospitality businesses, in addition to being a News and Special Projects Producer for NBCUniversal. Follow Kyle on Twitter and LinkedIn.