Generation Z and millenials are searching for guidance when it comes to their finances, but they're not exactly sure where to look. In particular, some feel uncertain about how to prepare for retirement, and even worry that they've already hurt their chances of retiring.
In a survey released by NAPFA (National Association of Personal Financial Advisors), more than 30% of millennials and Gen Zers said they are not prepared for the future. In an attempt to find information they need, over one-third are looking online.
Finding advice online
Young Americans are feeling more confident about their investing decisions — and taking on more risk as a result. According to a recent survey by ETRADE, 70% of Millenial and Gen Z investors reported an increase in their risk tolerance for their portfolios, compared to 50% the year before. Unsure of where to go for guidance, millennials, Gen Z and other generations are turning to a place where they already go for information: the internet and social media.
Here's what survey respondents said:
- YouTube is the most popular social media platform for financial advice with 71% of millennials and 63% of Gen Z consulting the video-sharing platform
- 56% of Gen Z goes to TikTok to discuss financial planning
- 55% of Gen Z consults Instagram for financial advice, compared to only 36% of millennials
- Across all age groups, 39% of men get financial information from Twitter; 43% of women turn to TikTok
Those who seek out financial advice on social media platforms are largely putting the information to use, with more than 60% saying they have acted on the advice they found.
Acting on bad advice
In another recent survey from ExpressVPN, younger generations reported that their moods were negatively impacted by social media. According to the NAPFA study, their financial well-being may be negatively impacted, too.
Some respondents in the NAPFA study report being led astray by bad financial information. Nearly one out of six survey respondents feel they have "screwed up" their retirement, and over 16% within that group believe they did so as a result of listening to unqualified financial advice.
Whatever advice they're receiving online or on social media, it does not appear to be adequate when it comes to retirement preparations. Here's what respondents reported:
- 34% of millennials and Gen Zers say a lack of financial guidance is inhibiting to their ability to prepare for retirement
- 54% of Gen Z respondents aren’t preparing financially for retirement
- Saving for retirement with cryptocurrencies is most popular with millenials (26%), while more traditional vehicles like Individual Retirement Accounts (IRAs) is declining in popularity among this age group
- 1 in 8 millennials and Gen Z respondents admitted that Stash or Acorns are the only ways they save for retirement
- 20% have no retirement plan and have no idea when they will be able to retire
While respondents across generations report a need for better financial guidance, NAPFA's CEO says that going online or to social media may do more harm than good. That's because, unlike working with a professional, the advice available on social media is not tailored to someone's personal situation.
Other, more reliable sources are available to provide one-on-one financial guidance, and some are even free of cost. For those struggling to cover necessities or deal with a financial emergency, consider reaching out to a credit-counseling service for free coaching and support.
Methodology: The survey was released by NAPFA and conducted online by Atomik Research among 2,006 adults ages 22 to 64 in the United States. The fieldwork took place between Nov. 8-12, 2021. While the study didn’t indicate which definitions it used for the various generations, many pollsters use cutoffs similar to those of Pew Research: Generation Z is described as those ages 18 to 23 and millennials as those 24 to 39.