Coming of age in the aftermath of the financial crisis has some advantages. Millennials appear to be more sensible with their financial planning than baby boomers and Generation X.
More than half of millennials, defined as people between 18 and 34 years old, have set financial goals compared with only 38 percent of Americans age 35 and older, according to a new survey by Northwestern Mutual. The survey also found that 64 percent of millennials would rather save than spend.
"We are so much more like our grandparents behaviorally than our parents," said Chantel Bonneau, a millennial and financial advisor with Northwestern Mutual.
Savings is a top priority for many millennials. Retirement market research firm Hearts & Wallets reported in its 2014 survey of millennials that building an emergency fund was the generation's No. 1 objective and 52 percent of millennials were saving toward this goal.
"We've been quite impressed by the millennials we've had in our investor focus groups. They're not the slackers some would like to make them out to be," said Chris Brown, principal of Hearts & Wallets. "Many are very much engaged in their finances. They are doing everything they can to pay down debts, particularly student loans, and save and invest for their future."
When it comes to retirement, millennials take a bleak view of Social Security. Seventy-three percent of millennials surveyed by Northwestern Mutual said they expect to work past age 65 because Social Security won't take care of their retirement needs.
"Most millennials have zero confidence in Social Security," said Jean Wilczynski, a financial advisor in Old Lime, Conn.
Many of Wilczynski's millennial clients don't expect Social Security benefits to be available to them in retirement, she said. Yet the Social Security Administration projects it will have enough money from payroll taxes to cover three-quarters of Social Security benefits it has promised retirees after 2033, when its trust funds run out, according to the 2014 trustee's report. These projections assume Congress will not act to increase payroll taxes, raise the retirement age or cut benefits to improve the financial outlook of Social Security.
"Millennials believe it's all on them and their grandparents believed that, too," Wilczynski said.