Study shows millennials and Gen Z want experiences over traditional savings

According to a study conducted by financial group, Wealthsimple, millennials and Gen Z are prioritizing experiences and a better work-life balance over traditional notions of success like homeownership and retirement savings.

“They’re not looking at it in a linear fashion where you work and retire completely at 65. They’re really trying to strike a balance through their life enjoyment,” said Jennah Cornelissen, lead advisor at Wealthsimple.

The study found 78 per cent of millennials and Gen Z feel the concept of retirement needs to be modernized to better meet today’s realities. Instead of saving for homeownership, 57 per cent are prioritizing savings for travel.

Recent post-graduates Braydon Killen and Ian MacDonald said cost of living is part of the reason they do not save up for retirement.

“With the housing prices going up, I’ve been looking around and it’s just really wild how much they’ve gone up, so it’s kind of hard to put my mind towards that right now while I am young,” said MacDonald.

Killen believes the pandemic also attributed to the change in mindset of saving for the future.

“Because of the pandemic we were trapped for long so it makes you kind of want to live life again and get back out there.”

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The study shows that while most are not saving for a house or retirement, 53 per cent hope to stop working before they turn 55-years old.

Cornelissen said many are considering other ways to get there.

“They’re turning to their portfolios and investing as a way to sort of bridge that gap. They’re really looking to use that to fill the gap when they eventually do stop working and no longer have employment income.”

According to the study, 47 per cent of Gen Z and Millennials see investing as a way to fulfill their ambition.

“Instead of prioritizing work through so many years and then you retire, they’re really looking at prioritizing other things and striking a better balance throughout their life, so really trying to find that financial freedom to do the things that they can enjoy,” said Cornelissen.

She said while it is difficult, it is not an impossible goal to achieve.

“Seeking the right financial advice that is also personalized for you is important. Prioritization becomes important because not all of us can do everything at the same time and so really sitting down and asked yourself what your key goals are and what’s most important to you makes the saving goals and use of portfolio a little bit easier.”