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NEW YEAR NEWS TO 'KNOW' | How Boomers and Millennials Differ

NEW YEAR NEWS TO 'KNOW' | How Boomers and Millennials Differ

December 28, 2023

My team or I sometimes come across an article we feel needs to be shared; below is such an article. Times are changing, and you may be at a place where you are at the beginning, middle or later in your financial journey. This article shows that we can learn from the younger and older generations; we all have something to learn or teach. Before you start reading, below is a brief generation lesson; which one are you?

The Greatest Generation: Born 1901-1927
The Silent Generation: Born 1928-1945
Baby Boomers: Born 1946-1964
Generation X: Born 1965-1980
Generation Y or Millennials: 1981-1996
Generation Z or iGen: Born 1997-2010
Generation Alpha: Born after 2010

source: https://www.parents.com/parenting/better-parenting/style/generation-names-and-years-a-cheat-sheet-for-parents/

We are in the midst of an unprecedented transfer of wealth, with trillions of dollars being moved from one generation to the next. This transfer challenges many commonly held notions as new values and interests become more prominent. In short, the economy is changing, and while some of these new practices might raise an eyebrow or two, not all of these ideas are without merit.

For someone from the boomer generation, it might be easy to become upset with or confused by millennials' differing points of view. However, taking note of the differences between the two generations can foster better communication and understanding.

The younger generations, including millennials, Gen Z, zoomers, and whatever else you call them, have a different perspective on wealth than their forebears. As these generations reach middle age, an interesting trend has emerged in emphasizing YOLO (You Only Live Once). Now that these generations have the steering wheel, they seem to be stepping on the gas and running full force into exciting, once-in-a-lifetime experiences.

At this point, it bears looking at the “why” of the YOLO economy. In other words, why do these forty-somethings spend as if there is no tomorrow?

Less money: Your average 40-year-old earns about $49,000 a year. While this is more than the 40-year-olds of the previous generation, the rising cost of living has taken a significant bite out of that difference.1

Less control: This generation also holds a smaller piece of the pie. While the post-WWII cohort controlled 22 percent of wealth in the United States once it reached middle age, millennials only controlled seven percent.2

Perhaps the biggest factor is less marriage: Middle-aged millennials are less likely to be married or start families than prior generations. Only 44 percent of millennials have walked down the aisle by age 40, compared to 61 percent for Generation X and 53 percent for baby boomers. Only 30 percent of millennials live with a spouse and at least one child, far lower than prior generations. This means that the expenses that come with a family are also off the table. If you aren’t married, the costs of a possible divorce are simply gone. Without children, you don’t have to pay for school clothes each fall, braces, and everything else that comes with helping a child grow up.3

The result is a very different economic picture for today’s middle-aged individuals. Consequently, all of these differences have informed a different set of values. Among millennials, 78 percent prefer spending money on experiences rather than material things. While prior generations may have placed more importance on things like home ownership, car purchases, and investments, millennials are looking at a different future with disparate priorities. For these reasons, spending on travel, exclusive events, and entertainment has become a priority.4

Of course, many boomers today find themselves in similar situations as middle-aged millennials. Most of the boomer generation is retiring, with their children grown and perhaps needing further stimulation in their golden years. While many keep working part-time, start businesses, or help their families with childcare, there may be a pang of that YOLO spirit in them as well, and a similar yearning for adventure.

And for good reason. While their middle-age experiences may have been very different, there is no better time than now to take that big trip you’ve always thought about. Maybe it’s time to splurge on those expensive concert tickets or challenge yourself through a special adventure that always seemed impractical, like learning to SCUBA dive or skydive.

This might be too far for some, but it’s important to remember that wealth can serve us in two ways: providing security and allowing us to enjoy life. If you’ve been working hard with our financial professionals to pursue that security, maybe it’s time to talk to us about your need for enjoyment.

It’s also possible that the younger people in your family have done too much YOLO and not enough saving and investing. A conversation with our financial professionals may help them understand how to balance living for today and preparing for tomorrow.

I want you to 'KNOW' from this article that no matter what generation you are, we all need to enjoy life BUT still save for retirement. Dixon Financial Group is here for that reason, and Jacob and I want to help you find balance. Start the New Year with balance; contact us to start your retirement-saving journey, or introduce us to the Generation X, Y, & Zs that could use our services. We look forward to working with ALL generations; it is never too early to start saving and planning your retirement.

Happy Holidays!

David S. Dixon, CFP®

Jacob S. Bierstedt, CFP®, ChFC

#DixonFinancialGroupLV #SaveForRetirement #FinancialAdvisors #FinancialPlanning #Generations

1. Businessinsider.com, February 22, 2023
2. Fortune.com, March 22, 2023
3. Pewresearch.org, October 19, 2023
4. Harris Interactive, October 19, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.