According to the Pew Research Center and the U.S. Census Bureau, Millennials (born 1981 through 1996) have surpassed Baby Boomers as the largest living generation. While millennials aren’t known for having the strongest work ethic or being “adult” in many ways, they do actually have a few things to teach us about managing money (for an optimal lifestyle) and preparing for a future retirement.
It turns out that some of the key traits and markers of millennials are good lessons for those of us looking to make the most of our future financials and life itself. Here are 8 millennial trends to consider for a more prosperous and fulfilling retirement.
1. Sell the House
Millennials have the lowest home ownership rate for their age group in history. While this might not bode well for their own wealth creation, it can be a good model for those of us who already own a home.
If you are like most people nearing retirement, your home is your most valuable asset. And, the equity you have built up in your home can be used for retirement. Many people downsize into smaller or less expensive homes at retirement and use the profit from the sale of the larger home to retire earlier or enhance their spending power.
Intrigued? Use the NewRetirement Planner to try a “what if” scenario for downsizing, moving abroad, securing a reverse mortgage or securing a home equity loan. The NewRetirement Planner is the most flexible, comprehensive, and powerful tool for planning a secure future. And, it is the only online planner that enables you to model tapping into your home equity.
2. Sell the Car
The research is not crystal clear, but millennials may have lower car ownership rates than any previous generation. To get around, they opt for bike riding, public transportation, and car sharing services.
If cost cutting is of interest to you, then selling your car may be a great option. Did you know that transportation is, on average, the second highest cost in retirement? Transportation costs retirees more than even healthcare. Only housing costs more.
If you want to get rid of your car, look at the walkability of your neighborhood, public transportation options, and the availability of taxis, Uber, and car sharing services (Zipcar, Getaround, and Hertz on demand) in your community.
3. Get Rid of Your Phone and TV
Very few Millennials still have a traditional landline in their home. Similarly, many millennials have cancelled cable TV subscriptions and instead watch shows on their computer via streaming services.
Depending on your own preferences, you might explore these options for some small monthly savings.
4. Talk About Money
Once upon a time, taboo topics for polite conversation included sex, politics, and money.
For better or worse, most of us now feel freer to talk about a wide variety of subjects, but personal finance remains an uncomfortable subject.
However, millennials are beginning to change the taboo on talking about money, online at least. According to Meghan Leonhardt at CNBC, three-quarters of millennials couples talk about money once a week.
Talking about money is a good thing. Behavioral research has found that having peers who have good financial habits can help you to have good financial habits. It is kind of like healthy eating and exercise. You are more likely to engage in positive behaviors if your peers are engaged in those behaviors and talking about them. Furthermore, you can gain a lot of useful information by sharing ideas with friends.
5. Seek Adventure
According to Jeff Froms, President of FutureCast, a marketing consultancy that specializes in millennial trends, millennials crave the joy of adventures and discoveries, whether epic or everyday.
Seeking adventure and new experiences is a great idea for a better retirement. As we get older, the perception is that time is passing more quickly. More things are familiar to us and our brains can process what we know faster than what we have never experienced before.
You can actually slow down the clock by trying new things. New experiences take more time to process, making time appear to last longer.
6. Use Technology
According to a Nielsen survey, millennials cited technology use as the most defining characteristic of their generation.
While you are probably not going to let technology take over your life, there are some pretty useful ways to use phones and computers to enhance your financial life and have a better retirement.
- Having trouble connecting with your kids or grandchildren? Try texting them. Even better, see if you can connect over Instagram or Snapchat. Go to where they are.
- Plan your vacation or find a retirement job. Technology is a great way to plan almost any aspect of your retirement.
- In fact, you can plan your retirement and manage your finances online. Planning does not need to be scary or complicated. The NewRetirement Planner makes it easy. Take two minutes to enter some initial information, then see where you stand today. Next, start adding more details and changing some of your information. Discover meaningful ways you can improve your retirement finances. This tool was named a best retirement calculator by the American Association of Individual Investors (AAII).
Millennials don’t only work for a paycheck. They tend to want to spend their time on pursuits that are meaningful to them.
This is a positive, especially as you enter retirement. As you grow older, it is increasingly important to live your life with purpose. Explore 6 ways to find meaning and purpose as you age.
Millennials are not known as being the best savers of all time. They are instead avid spenders. And, they especially like to spend on travel and experiences.
While saving is usually entirely necessary for a secure future, once you achieve retirement or financial independence, the name of the game is actually spending. So, millennials are a good model.
People have a really hard time spending their hard earned savings once they reach retirement. If this is you, here are 9 ways to overcome the spending your retirement savings.