Inflation Hitting Millennials Hardest as They Seek to Meet Needs

In response to inflation, 19% of Millennials have cut their insurance and retirement contributions, more than any other generation, according to a recent survey.

Whereas 10% of Gen Z, 9% of Gen X and 5% of Baby Boomers have reduced allocations to retirement and insurance, according to new research from firms TalentLMS, Enrich Financial Wellness, and Tapcheck. The report surveyed 1,000 full-time employees in the U.S. from October 3 to 5, 2022.

“As an elder Millennial myself, I think there are just so many competing priorities,” says Kerry Woods, vice president of participant education and engagement at SageView Advisory Group, who is not associated with the survey but covers financial wellness. “With the cost of living going up so significantly, over a short period of time, [and] higher interest rates, it’s tougher to purchase a home. … It’s a tough time to meet all the needs.”

The desired age for retirement also differs between generations. For Baby Boomers, 65% of employees want to retire when between 60 and 70 years old, while only 20% of Gen Zs selected that range. The majority of Gen Zs and Millennials, approximately one in three, want to retire between the ages of 50 and 60. Gen Zs were most likely to indicate the desire to retire before turning 40, at 20% of respondents.

“It’s such a cultural shift in priorities that we are seeing play out in real time; it’s really interesting to watch,” Woods says.

Woods thinks companies should recognize the differences between generations to help employees reach their financial goals.

“Recognizing those generational differences is going to be the bedrock of realizing how to help their employees,” says Woods.

Nearly half of employees (41%) reported that they do not receive financial wellness training from their companies, while 8% said they are unsure if they do.

On the topic of retirement savings, 64% of respondents said they received training on retirement planning, which is the training most offered by employers. Seventy-nine percent of employees said it was important to receive resources from their employers for retirement planning.

Nearly one in three employees, however, do not feel they are on track to meet their financial goals and retire by the desired age. To combat inflation, 11% of employees have reduced their spending on insurance and retirement contributions.

Across the board, Woods thinks foundational financial training remains important across all age groups. “But on top of that, giving them resources to be able to educate themselves [and] providing financial education, as it relates to multiple topics, even outside of retirement,” says Woods.

“I think that, depending on your financial acumen, there’s this general sense of uneasiness regarding finances. I know when I get a bill in the mail, I don’t always want to open it right away,” Woods says, advising how companies should approach employees. “I think addressing that, first and foremost, being able to say, ‘These are the tools, and resources are here, and your financial situation doesn’t have to be a scary topic.’”