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How millennials look at retirement is entirely different from their parents

By Finserv MARKETS - Aug 1,2019
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Introduction:

For millennials, financial planning for retirement is a tricky affair. In fact, financial planning for more than 5 years in the future sounds absurd. And with good reason. While their parents grew up knowing what their retirement is going to look like, millennials are thriving and surviving in a world that’s constantly shaken by technology and disruptions. How does one adjust the retirement expectations for a world that is very different even to that of ten years ago? Who’s to say the investments made today will make sense 5 years from now?

Each day we come across headlines that millennials have been disrupting industries and breaking conventions – the safest of businesses can go under, unusual services can become mainstream and innovations can bring stock prices to skyrocket. It is true that millennials have a spending-oriented lifestyle and are keen on short-term planning than providing for ambiguous goals in the future. However, the political, social, economic and technological climate is massively volatile and dynamic. Because of this generation born in the lap of the digital boom realises that it has never been more important yet more challenging to save for retirement. They seek the best investment options, are picky about where to invest money and still aren’t afraid to take risks.

Retirement-related life goals are becoming a priority, especially amongst Indian millennials.

That is what a survey by HSBC reports. The world is changing and retirement is changing with it. For the millennials, retirement is a goal, but the ambition is not just to have financial security. Their idea of providing and planning for retirement extends beyond a regular source of income and a retirement home – they seek more adventure even in the golden years. Let’s look at the defining trends.

There is little confidence when it comes to retirement – greater life expectancy, ageing populations and rising national debts together mean that millennials aren’t too hopeful about getting external support. The survey also reports that 60% of working-age people in India are concerned about declining state pensions/social provision and 67% about the growing number of older people requiring retirement funding/support. Almost two-thirds (65%) of working-age people agree that levels of national debt mean there will be less support for the elderly. One in five (20%) working-age people believe state pensions will no longer exist when they come to retire. Clearly, millennials are on a ferocious hunt for the best investment options that can align with their lifestyle and financial needs of the present as well as future.

However, despite and because of this pessimism surrounding the retirement facilities, millennials are proactively working towards their aspiration of retiring rich.

In light of this, a majority of working-age people say they will continue working to some extent in retirement, or defer their retirement for two years or more to have a better retirement income, while others are also willing to work for longer to get a second job to sustain their saving for retirement.

When asked about what they consider to be the best investment options for funding their retirement, here’s what the working-age millennials suggested:

How millennials look at retirement is entirely different from their parents
The interest rates in the economy are not very encouraging, so it makes sense that the Gen Y seeks options with more stability. 60% of working-age people think they will need to move their money from savings into investments and 68% actively move their money around to get the best return/deal, compared to the global average of 47%. 52% of people believe that Millennials have experienced weaker economic growth than previous generations. Therefore, it is no wonder that millennials are also seeking stability while keeping up with the volatile times. Only 21% of people think millennials are in the best position for a comfortable retirement, compared to 34% who think baby boomers are.

Another striking trend is that millennials are now increasingly prepared to cut back on their present expenses in order to save and they view saving as a difficult but necessary task. An off-beat aspect of how millennials look at retirement is that they are bound to make use of new technology to make financial plans and figure out where to invest money. They are willing to seek information, use online tools and even get professional advice. One avenue they can consider investing in is the National Pension Scheme (NPS). National Pension Scheme (NPS) is the solution to a secured life, post-retirement. This scheme functions as an investment and pension plan by providing income along with market-based returns which proves to be helpful, especially during old age. The best part? The digital natives can seek the best investment options online with Finserv MARKETS. With the entire process online, NPS subscription process will be hassle-free on Finserv MARKETS. Moreover, an NPS account can be operated from anywhere. With online accessibility, subscribers can change jobs and even move from one city to another and yet manage/track their funds under the National Pension Scheme.

“Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere”!

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