MINNEAPOLIS, Sept. 19, 2016 – Americans are now living an average of 30 years longer than a century ago, and millennials have emerged as the most optimistic generation when it comes to embracing the new possibilities afforded by this increased longevity. Despite being the least financially prepared and most overwhelmed by the idea of long-term planning, millennials showed a high level of interest in breaking away from the traditional linear “school-work-retirement” life path in order to take chances earlier in life, according to The Gift of TimeSM*, a new study from Allianz Life Insurance Company of North America (Allianz Life®).
Nearly seven in 10 millennials (69% versus 58% of boomers and 68% of Gen Xers) said they would prefer to “explore, experiment and travel” prior to retirement and follow a different path in terms of how they learn, work, partner and raise families. Similarly, when asked to design their ideal longer life, more than half (52%) of millennials said they would prefer a more non-traditional path, unique to their interests, where they might work, take breaks, volunteer and try different things—and in no set order.
Millennials also reported having a greater interest in taking advantage of their 30 extra years by living more adventurously. This includes traveling extensively (58% versus 54% boomers/56% Gen Xers), living in a different city/state/country (41% versus 27% boomers/35% Gen Xers), pursuing a dream like starting a business (36% versus 21% boomers/30% Gen Xers) and taking more risks in life (29% versus 19% boomers/23% Gen Xers).
In fact, millennials expressed the most regret about not taking more chances in their past, with more than a third (38%) saying they wished they’d been more gutsy in their choices and done things they really wanted to do. As a result, a higher percentage of millennials recognize the opportunity to experiment with different types of jobs and explore alternatives in the future, including being more active in volunteer and environmental work (23% versus 20% boomers/15% Gen Xers), pursuing creative careers (20% versus 14% boomers/16% Gen Xers), and working fewer hours but for more years (retiring later) (18% versus 15% boomers/15% Gen Xers).
“It’s encouraging to see so much optimism and non-traditional thinking from millennials about the possibilities afforded by increased longevity,” said Allianz Life Vice President of Consumer Insights Katie Libbe. “Their generation has the best opportunity to make life changes and adjust the way we all think about the current path to retirement. However, in order to make these shifts, millennials need much better discipline in both their spending habits today and savings behavior for tomorrow.”
Barriers – More than Just Money
Although the desire is clearly there, the challenge of pursuing a non-traditional life path can be a harsh reality for millennials as they have the least savings for retirement and non-retirement, the weakest assets, the lowest home ownership and the highest debt among the three generations surveyed. In fact, millennials reported an average of $150,000 in estimated mortgage, student loan and credit card debt – 89% higher than boomers ($79,000 total estimated debt).
As a result, money remains a major barrier for millennials when it comes to planning for the future. Sixty-three percent of millennials cited “worries about money” as the top thing that gets in the way of a different approach for when/how we learn, work, couple and raise kids – compared to 56% of boomers and 59% of Gen Xers. In addition, a higher percentage of millennials (81%) said money was the top factor that got in the way of making alternative choices in their lives, versus 70% of boomers and 78% of Gen Xers.
Said Libbe, “It’s ironic that the generation that wants to distance itself from the perceived constraints and trappings of money is the generation most at odds with it. For many millennials, money is the single most important factor dictating the direction of their lives.”
Fear of Being Judged
In addition to money, another factor holding millennials back from following their dreams is lack of confidence based on judgment from others. When asked whose opinions they care about more than they ought to, millennials had the highest response for every category, including “what my family thinks” (35% versus 25% boomers/31% Gen Xers); “ what other people think” (29% versus 20% boomers/27% Gen Xers); “what society thinks” (21% versus 9% boomers/14% Gen Xers ); and “what people at work think” (13% versus 5% boomers/9% Gen Xers). Millennials also reported being nearly twice as worried as boomers about others judging their life choices (44% versus 24%).
Overwhelmed but Willing to Change
This lack of confidence with decision making has repercussions with their finances, as millennials feel intimidated and overwhelmed by the prospect of planning for longevity. When asked what is most difficult in financially preparing for living 30 extra years, 30% of millennials said they don’t know “where or how to begin,” higher than both boomer (14%) and Gen X respondents (24%). More than a quarter (27%) of millennials, also said that “just sitting down to start a plan” to address living that long is “overwhelming.”
On the positive side, millennials seem to understand that they need to save more money and plan better if they want to truly take advantage of increased longevity. When asked about their first reaction upon learning they’d live to age 100, the top 2 responses among millennials was “I better start saving money” (44%) and “I better get serious about financial planning” (41%).
“At first glance, the financial situation for millennials may look grim, but that’s mitigated by their willingness to embrace a new model for living longer lives and understanding of what it will take to get there,” added Libbe. “I believe this generation can shift our perceptions of financial planning and demonstrate that longevity can be about following dreams, having a more flexible life and taking the road less traveled.”
More from The Gift of Time Study
For more information about the study and to see examples of people embracing longevity and choosing their own nontraditional life path, visit www.allianzlife.com/TheGiftofTime. In the coming months, Allianz Life will release additional data from The Gift of Time Study.
About Allianz Life Insurance Company of North America
Allianz Life Insurance Company of North America, one of FORTUNE’s 100 Best Companies to Work For in 2016, has been keeping its promises since 1896. Today, it carries on that tradition, helping Americans achieve their retirement income and protection goals with a variety of annuities and life insurance products. In 2015, Allianz Life provided a total of $2.4 billion in benefit payments that supported policyholders’ financial objectives. As a leading provider of fixed index annuities, Allianz Life is part of Allianz SE, a global leader in the financial services industry with 142,000 employees in more than 70 countries worldwide. More than 85 million private and corporate customers rely on Allianz knowledge, global reach, and capital strength to help them make the most of financial opportunities.