The generation that has been largely hammered by the economy for the past dozen-plus years is actually feeling optimistic about their financial outlook. That’s despite economic uncertainty and high inflation, and the looming dread of paying off their student loans again.
Roughly six out of 10 millennials (ages 27 to 42) feel good about their finances, according to new research from Ameriprise Financial, which surveyed 3,518 U.S. adults ages 26–77 who had at least $25,000 in investable assets. For context, middle-class millennial households had an average of $17,800 in financial assets in 2019, according to National Institute on Retirement Security's analysis of the latest Federal Reserve data available.
So what’s behind that confidence? A number of factors—including a greater financial awareness in some respects and help along the way from their families, says Marcy Keckler, senior vice president of financial advice strategy at Ameriprise.
The latest murky economic outlook doesn’t seem to be phasing millennials too much, likely because they’ve experienced so much upheaval, many having graduated into the Great Recession and its aftermath—and know how to respond. The vast majority of millennials surveyed (95%) report they’ve already taken steps to help them weather potential economic fallout. About 60% cut their spending already, while 48% say they are saving more.
“This millennial generation has a level of resilience…likely because they have seen challenges in their formative years,” Keckler tells Fortune. Additionally, millennials, more so than other generations, are really in charge of shouldering their own retirement planning, and acting sooner to get on track.
Amerprise’s research shows that millennials started saving for retirement earlier than Gen X and baby boomers (age 25 compared to ages 28 and 30, respectively) and initiated working with a financial advisor when they were younger. “This generation, while facing challenges, has gotten moving a little bit earlier on some of those smart financial actions,” Keckler adds.
But many millennials also had significant amounts of help getting to where they are today. Nearly eight in 10 millennials (78%) received some type of financial boost from their families, including help paying for college, down payments on cars and homes, and inheritances. It’s not just small potatoes: 27% received at least $25,000 in financial help. (And that doesn’t account for the savings boost that some have benefited from by living with their parents.)
At a time when baby boomers are not expecting their adult children to care for them or to pitch in financially, Keckler says, many millennials don’t expect that gravy train to stop. About 41% of millennials believe they’ll receive financial help in the future, compared to just 24% of Gen Xers and 5% of boomers. Keckler advises they have a Plan B, “in case that expected financial health doesn't materialize.”
But it’s not like millennials are completely carefree when it comes to their finances; most are concerned about inflation and interest rates. Meanwhile, 80% are carrying some type of debt, ranging from mortgages and student loan debt to credit card balances, Keckler says. About half say their debt is getting in the way of achieving some other financial goals.
Yet, the most common money goal among millennials is finding ways to increase their income—and many are succeeding. More than one-third of millennials (36%) already receive passive income from sources, including dividends, rental income, and royalties.
Overall, Keckler says she’s optimistic about this generation’s financial future. “There is a nice combination of being clear-eyed about challenges and being focused on taking smart actions that demonstrate financial responsibility, even in the face of challenges.”
