Millennials say the coronavirus pandemic affected their financial stability, according to a new report from Age Wave and Edward Jones.
For millennials, the impact of Covid-19 on their financial stability is almost twice as high as their baby boomer parents.
The report polled 9,000 Americans from five generations in May and June. Findings showed that about a third of millennials (ages 24 to 39) and Gen Z (ages 18 to 23) acknowledge the extreme or very negative impact of the pandemic on their financial security.
Only 16% of baby boomers (ages 56 to 74) and just 6% of the silent generation (ages 75 and older) had the same sentiment.
Moreover, younger generations admitted that they have also experienced a mental decline since the pandemic began in March. Results showed about 37% of Gen-Zers and about 27% of millennials believe Covid-19 say has negatively affected their mental health, compared to 15% of baby boomers and 8% of the silent generation.
“There are a lot of young people that are kind of running around pulling their hair out right now,” says Ken Dychtwald, psychologist and founder and CEO of Age Wave. Meanwhile, older generations reported having fortitude, Dychtwald says.
Financial resiliency
He said that the mental and financial resiliency of older generations is attributed to their ability to depend on safety nets. Those over 65 already have Social Security and Medicare benefits that the pandemic has not affected in any way.
“If you’re retired, you’ve moved on from the chaos of the workforce,” Dychtwald says. “People in their 20s, 30s, 40s and even 50s are getting up each day and trying to figure out if they’re going to continue to have a job, if they’re going to get an unemployment check, if they’re going to be able to pay the bills. If you’re retired, you’re not worried about that.”
The older generations are also reliant on home equity to overcome this latest financial turmoil. Around 78% of retirees own their homes and 60% have settled their mortgage, according to Age Wave.
“They’ve got lower rent and mortgage payments than the kids living next door or the Gen-Xer trying to raise a family across the street,” Dychtwald says. With safety nets and a secure home, as well as some perspective on having experienced other times of hardship, older generations have less stress during this time.
Financial assistance
Meanwhile, boomers are helping out their adult children. Since the coronavirus pandemic started, 1 in 4 parents, which is around 24 million Americans based on Age Wave’s estimates, have given financial support to their adult children. Meanwhile, 37% of Gen Z respondents said they got assistance from their parents, while about 26% say they returned to their home.
Age Wave’s calculations showed that about 20 million Americans stopped contributing to their retirement savings during the pandemic, and this includes about 15% of millennials.
Meanwhile, around 29% of all Americans polled say they want to retire later, with the average individual saying they believe they will retire about 3.3 years later than they initially anticipated.
Dychtwald expects the Covid-19 outbreak to impact younger Americans in the long run. He added that Gen-Z will be much more financially careful than baby boomers.
“There’s no question that this is a formative, powerful, never-forgotten situation that will shape this generation for the rest of their lives,” Dychtwald says.
