Understanding Tomorrow’s Investors -...
Transcript of Understanding Tomorrow’s Investors -...
Generation Z and Money Survey
Understanding Tomorrow’s Investors June 20, 2012
Table of Contents Research Method 3
Meet Gen Z 4
Financial Product Usage and Financial Situation 9
Attitudes and Behaviors Toward Saving and Money Management 19
Attitudes, Planning and Saving for Education 29
Attitudes, Planning and Saving for Retirement 41
Appendix: Study Sample Characteristics 48
TD Ameritrade, Inc., member FINRA/SIPC/NFA, is a subsidiary of TD Ameritrade Holding Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2012 TD Ameritrade IP Company, Inc. All rights reserved. Used with permission.
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Research Method • An online survey was conducted with N = 2,001
U.S. residents from April 27 to May 1, 2012, by Head Research on behalf of TD Ameritrade, Inc.:1
– Sample was drawn from major regions in proportion to the U.S. Census:
• New England (5%), Mid-Atlantic (16%), South (25%), Midwest (22%), Southwest (12%), West (20%)
• In each region, approximately half of the respondents were male and half were female
– Two primary groups were included:
• Generation Z 13- to 22-year-olds (born 1990 to 1999): n = 1,001 (“Gen Z”)
• Parent(s) of a 13- to 22-year-old Generation Z child: n = 1,000 (“Parents”) Note: The words “Parent(s)/Guardian(s)” were used throughout the survey questionnaire; however, to simplify reporting, the words “Parent(s)/guardian(s)” have sometimes been replaced with “Parent(s)”
– The survey took each participant 12 minutes to complete, on average
– The statistical margin of error for results from major groups in this study (i.e., Generation Z and Parents) is +/- 3.1%.2 This means that, in 19 out of 20 cases, survey results for each group will differ by no more than 3.1% in either direction from what would have been obtained by the opinions of all target group members born in the U.S.
1 Head Solutions Group (U.S.) Inc. and TD Ameritrade, Inc. are separate, unaf!liated companies and are not responsible for each other’s products and services
2 Assumes responders are the same as non-responders and that panelists are the same as non-panelists
About TD Ameritrade Holding Corporation Millions of investors and independent registered investment advisors (RIAs) have turned to TD Ameritrade’s (NYSE: AMTD) technology, people and education to help make investing and trading easier to understand and do. Online or over the phone. In a branch or with an independent RIA. First-timer or sophisticated trader. Our clients want to take control, and we help them decide how - bringing Wall Street to Main Street for more than 36 years. An of!cial sponsor of the 2012 U.S. Olympic Team, TD Ameritrade has time and again been recognized as a leader in investment services. Please visit the TD Ameritrade newsroom or www.amtd.com for more information. " Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org) /SIPC (www.SIPC.org ) /NFA (www.nfa.futures.org) About Head Research Head Research is a division of Head Solutions Group (U.S.) Inc., a leading market research partner for Financial Services companies in North America. With of!ces in New York, Toronto, and Montreal, Head delivers the deep customer insights that increase institutional knowledge and propel business action.
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Meet Gen Z
4
52 57
48
46 37 39
27
23
30
68
66
62
60 46
45
35
34 28
0
20
40
60
80
It's more important to be accurate than fast
I'm accepting of different ideas/opinions
I'm #exible/easy going
I'm ambitious
Prefer doing things myself My parents worry/worried about money a lot
I'm impatient
My parents talk/talked about having too much
debt
I prefer electronic vs. in person communication
with friends
Gen Z Parents
To what extent do you agree or disagree with each of the following statements?
Chart shows % of respondents who agree with each
statement (i.e., selected 7, 8, 9 or 10 on an 11-point agreement scale)
• The following chart shows how Gen Z and Parents of Gen Z children feel about a variety of issues: – It is clear that Gen Z and Parents
differ signi!cantly in a number of fundamental ways – these data may explain some of the differences with respect to money and saving covered in this report
– Gen Z rate themselves as being accurate, accepting of other ideas/ opinions, #exible/easygoing and ambitious, collaborative (i.e., more prefer group activities) and patient. Gen Z also claim their parents talked and worried about money/debt less than Parents say their parents did
– Interestingly, one area Gen Z and Parents did not differ on is that of electronic communications. Gen Z are no more likely to prefer electronic communications for interpersonal relationships than Parents
Personal Style of Gen Z vs. their Parents
Base: Gen Z (n = 1,001), Parents (n = 1,000)
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• Gen Z and Parents of Gen Z children were asked to indicate their biggest concerns about the economy: – Without any prompting, Gen Z and Parents are generally worried about the same things: Their No.1
concern is jobs and unemployment, mentioned spontaneously by one out of every four survey respondents
– Double the number of Gen Z respondents (20%) than Parents (11%) indicate they have no particular worries
Concerns about Today’s Economy
Base: Gen Z (n = 1,001), Parents (n = 1,000)
GEN Z PARENTS
Jobs/unemployment
Nothing in particular/no worries
Gas/oil prices
Not having enough money
Inflation/rising cost of living
Market failing/crash
Economy getting worse
National debt
26%
20%
8%
8%
6%
5%
5%
5%
Jobs/unemployment 25%
Nothing in particular/no worries
Gas/oil prices
Not having enough money
Inflation/rising cost of living
Market failing/crash
Economy getting worse
National debt
11%
11%
10%
9%
8%
8%
6%
Note: responses given at a frequency of less than 5% are not shown. Respondents were allowed to give multiple responses.
6
16 17
28 31 32 33 33 35
39 39 40
0 10 20 30 40 50
Not concerned about anything Credit card debt
Making poor !nancial choices Counting on social security
Saving for retirement Affording healthcare
Financially support parents Ability to buy a home
Large student loan balance Affording college
Having identity stolen
% of Respondents
25 28 28
31 32 33 34 34 36 37
42
0 10 20 30 40 50
Having identity stolen Credit card debt
Financially support parents Making poor !nancial choices
Affording healthcare Saving for retirement Ability to buy a home
Counting on social security Large student loan balance
Not concerned about anything Affording college
% of Respondents
How concerned are you about each of the following?
• Gen Z were asked how concerned they were about a series of topics using an 11-point scale. Parents were asked to indicate how concerned they were about these same topics when they were their Gen Z child’s age. The following graphs show the percent of respondents who selected the top three scale points for each issue, meaning they were very concerned about these issues: – It is interesting to note that while Gen Z and Parents are/were both most concerned about affording college and
having a large student loan balance when they !nish(ed) school, Gen Z are equally worried about having their identity stolen. Saving for retirement preoccupies 1/3 of Gen Z (as it did Parents when they were the same age).
– It is also worth noting that when Parents were their child’s age, 37% weren’t concerned about any of these issues, whereas only 16% of Gen Z aren’t concerned by them.
Top Concerns of Gen Z and Parents
GEN Z PARENTS
How concerned were you about each of the following?
Base: Gen Z (n = 1,001), Parents (n = 1,000)
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• Gen Z answered the open-ended question: “If you were given $500 today, what would you do with it?” – It is interesting that more said they would save (55%) than spend (32%) it – not surprisingly, “good
budgeters” were more likely to say they’d save it than “poor budgeters” (59% vs. 52%) and “poor budgeters”1 were more likely to say they’d spend it than savers (37% vs. 26%)
– One out of every 10 Gen Z (11%) spontaneously indicated they would use this money to pay for college
How Gen Z Would Spend $500
Base: Gen Z (n = 1,001) A "good budgeter," as de!ned in this study, is a person who said they have a budget and follow it carefully. A “poor budgeter" is a person who says they do not know how to budget, does not have a budget or has a budget, but doesn’t follow it carefully.
Would save it (no specific vehicle)
Would spend it
College savings
Living necessities (e.g., rent, utilities, food)
Give it to my parent(s)/guardian(s)/family
Use it to pay bills/debt
55%
32%
11%
9%
8%
5%
8
Financial Product Usage and Financial Situation
9
Financial Product Usage: Current Usage
Base: Gen Z (n = 1,001)
“Which of the following !nancial products, if any, do you have?”
27
0
3
3
3
3
4
6
16
26
40
56
0 10 20 30 40 50 60 70 80
None of the above
I don't know
Other
IRA (Traditional or ROTH)
Custodial IRA (for a minor)
Other vehicles like Money Market, etc.
401(k) or 403(b)
529 College Savings Plan
Student loan(s)
Credit card
Checking account
Savings account
% of Respondents
• Gen Z were asked which !nancial products they currently have: – Most Gen Z have a savings (56%) or
checking (40%) account – 32% have both
– One in four Gen Z have a credit card and 16% have a student loan
– 19% of Gen Z have an investment/savings product (i.e., 529 College Savings Plan, 401(k)/403(b), Other vehicles like Money Market, etc., Custodial IRA/IRA/ROTH)
– More than one-quarter (27%) of Gen Z have none of the !nancial products listed
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“Which of the following !nancial products, if any, do you have?”
Financial Product Usage: Gen Z Child
Base: 13- to 15-year-olds (n = 235), 16- to 18-year-olds (n = 333), 19- to 22-year-olds (n = 433)
13
2
4
4
5
6
6
29
41
62
66
32
3
1
2
1
1
6
7
17
28
54
45
3
2
2
3
4
6
6
10
16
41
0 20 40 60 80
None of the above
Other
IRA (Traditional or ROTH)
Custodial IRA (for a minor)
Other vehicles like money market, etc.
401(k) or 403(b)
529 College Savings Plan
Student loan(s)
Credit card
Checking account
Savings account
% of Respondents
13- to 15-year-olds 16- to 18-year-olds 19- to 22-year-olds • The following chart shows
!nancial products used by various Gen Z age groups: – Not surprisingly, older age groups
are significantly more likely to have financial products than younger age groups
• Although not shown on this chart, it is interesting to note that: – 23% of 19- to 22-year-olds claim not
to have either a checking or savings account – this number rises signi!cantly to 41% for 16- to 18-year- olds and 55% for 13-to 15-year-olds
– Good budgeters (i.e., those who have a budget and follow it closely) are significantly more likely to use all financial products than those who are poor budgeters or those who don’t budget at all
11
36
50
14
0
10
20
30
40
50
60
Yes I know what a credit score is but don't know mine
I don't know what a credit score is
% o
f Res
pond
ents
Credit Cards: Credit Scores • Gen Z who indicated they had a credit card (26% of the cohort) were asked if they
know what their credit score is – half indicated they know what one is but don’t know their own score (50%), while one-third said they actually know it:
– 14% of Gen Z who have a credit card do not know what a credit score is
Base: Gen Z who indicated they have a credit card (n = 260)
You indicated you have a credit card. Do you know what your credit score is?
12
3 5
12
7
10 11
8
5 3 3
6
3
23
0
10
20
30
0 1 2 3 4 5 6 7 8 9 10 11 12
% o
f Res
pond
ents
Credit Cards: Cyclical Debt • The majority of Gen Z with credit cards carry a balance on their credit cards for six
months of the year, on average (mean)
• Only 23% pay their credit card balance in full every month:
– Although not shown on this chart, “good budgeters”1 and those who are !nancially most independent are also most likely to pay off their credit cards every month – 28% of them indicated they pay off their cards every month
Base: Gen Z who indicate they have a credit card (n = 260) A "good budgeter," as de!ned in this study, is a person who said they have a budget and follow it carefully. A “poor budgeter" is a person who says they do not know how to budget, does not have a budget or has a budget but doesn’t follow it carefully.
How many months of the year do you pay your credit card off in full when you receive your statement?
56% carry a balance for six months of the year or more
23% pay their credit card off
every month
13
2,000
500 1,034
8,000
0
2,000
4,000
6,000
8,000
Gen Z 13- to 15-year-olds
16- to 18-year-olds
19- to 22-year-olds
Ave
rage
Inco
me
(Med
ian)
in $
Income: Amount and Source • Overall, the average (median) income for Gen Z is $2,000 per year; however, this
varies significantly by age – 19- to 22-year-olds have a higher average income due to the fact that more than half of them work: – Not surprisingly, the primary source of income varies signi!cantly as a function of age
Base: Gen Z (n = 1,001), 13- to 15-year-olds (n = 235), 16- to 18-year-olds (n = 333), 19- to 22-year-olds (n = 433)
Approximately how much income did you have from all sources in 2011, before taxes?
PRIMARY SOURCES OF INCOME BY AGE GROUP 19- to 22-year-olds 53% - income from working 18% - allowance from parent(s)/guardian(s)/grandparent(s) 9% - grants, teaching assistant, fellowships, scholarships 7% - loans from !nancial institutions
16- to 18-year-olds 46% - allowance from parent(s)/guardian(s)/grandparent(s) 30% - income from working 8% - loans from family members 6% - trust fund or inheritance
13- to 15-year-olds 52% - allowance from parent(s)/guardian(s)/grandparent(s) 23% - income from working 10% - loans from family members 5% - trust fund or inheritance
14
15
30
55
4 15
81
9
28
63
26
39 35
0
25
50
75
100
Child Pays (Independent)
Child Shares (Semi-Independent)
Someone Else Pays (Dependent)
% o
f Res
pond
ents
Gen Z 13- to 15-year-olds 16- to 18-year-olds 19- to 22-year-olds
Financial Responsibility: Basic Living Expenses • Overall, 55% of Gen Z are dependent on someone else paying their basic living
expenses – fewer are independent (15%) or semi-independent (30%), meaning they either pay all basic living expenses themselves (independent) or share them with someone else (semi-independent): – Those who are most often independent or semi-independent are between 19 and 22 years
old – 26% of this age group claim they are paying for basic living expenses themselves, 39% say they share them with someone else and 35% say someone else pays these expenses
– Some 13- to 15- year- olds indicate they pay all basic living expenses (4%) or share them (15%) with someone else
Who pays for your basic living expenses like rent, food, clothing, transportation, etc.?
Base: Gen Z (n = 1,001), 13- to 15-year-olds (n = 235), 16- to 18-year-olds (n = 333), 19- to 22-year-olds (n = 433)
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Financial Responsibility: Education Expenses • When Gen Z were asked who pays for school, tuition and books, the results were very
similar to those for basic living expenses, with half of the generation depending on someone else to pay:
– As with basic living expenses, there is a positive correlation between the age of the child and the amount of “!nancial independence” expressed; speci!cally, the older the child, the more likely he/she is to be paying for his/her own education expenses
18 22
51
9 6 10
75
9 12
24
56
8
30 26 34
10
0
10
20
30
40
50
60
70
80
90
Child Pays (Independent)
Child Shares (Semi-Independent)
Someone Else Pays (Dependent)
Not applicable / does not have education expenses
% o
f Res
pond
ents
Gen Z 13- to 15-year-olds 16- to 18-year-olds 19- to 22-year-olds
Who pays for your school tuition, books and other supplies?
Base: Gen Z (n = 1,001), 13- to 15-year-olds (n = 235), 16- to 18-year-olds (n = 333), 19- to 22-year-olds (n = 433)
16
35
28
37
14
23
63
30 29
41
51
29
20
0
10
20
30
40
50
60
70
Child Pays (Independent)
Child Shares (Semi-Independent)
Someone Else Pays (Dependent)
% o
f Res
pond
ents
Gen Z 13- to 15-year-olds 16- to 18-year-olds 19- to 22-year-olds
Financial Responsibility: Discretionary Expenses • As with other expenses Gen Z have, “financial independence” increases
with age; however, surprisingly, only 51% of Gen Z are paying for their own entertainment and other discretionary expenses even when they are 19 to 22 years old
Who pays for your discretionary and entertainment expenses like movie/concert tickets, cell phone, etc.?
Base: Gen Z (n = 1,001), 13- to 15-year-olds (n = 235), 16- to 18-year-olds (n = 333), 19- to 22-year-olds (n = 433)
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• When basic living expenses are being shared with someone else, Gen Z are most commonly sharing them with parents; however, others are also contributing – the same people are involved in sharing education and discretionary expenses as well:
Financial Responsibility: Who is Paying for Gen Z?
• When basic living expenses are being paid by someone else, they are most commonly being paid by parents; however, others are also paying – the same people are involved in paying education and discretionary expenses as well:
Shared with parent(s)/guardian(s)
Shared with spouse
Shared with roommate(s)
26%
6%
4%
Shared with grandparent(s)
Shared with another relative(s)
3%
3%
Parent(s)/guardian(s) pays most/all
Don’t know who pays
Grandparent(s) pays most or all
Spouse pays most or all
44%
6%
3%
2%
Another relative(s) pays most or all 2%
Someone else pays most or all 2%
Roommate(s) pays most or all 1%
Base: Gen Z (n = 1,001)
18
Attitudes and Behaviors Toward Saving and Money Management
19
18 6
76
0
20
40
60
80
Unimportant Neutral Important % o
f Res
pond
ents
Importance of Saving Money • Overall, the strong majority of Gen Z believe it’s
important to save money
• Although not shown on this chart:
– Importance does not vary signi!cantly by age groups within Gen Z
– Those whose parents spoke extensively with them about saving money (80%) are signi!cantly more likely to think saving is important than others (69%)
– Those who feel saving is important are signi!cantly more likely to be good budgeters (82%) than poor or non-budgeters (71%)
– Females (83%) tend to place more importance on saving than males (67%)
Base: Gen Z (n = 1,001)
At the present stage of your life, how important or unimportant is saving money to you?
20
47
35
10 8
40 35
16
9
46
37
11 6
52
34
7 7
53
39
6 2
0
10
20
30
40
50
60
Yes, extensively Yes, somewhat Yes, not very much No
% o
f Res
pond
ents
Gen Z 13- to 15-year-olds 16- to 18-year-olds 19- to 22-year-olds Parents
Talking About Saving Money • Most (82%) Gen Z indicate their parents have talked to them about saving money either
extensively (47%) or somewhat (35%) – Parents’ reports of how extensively they have discussed savings with their Gen Z children are in alignment with these !ndings:
– 19- to 22-year-olds (52%) are signi!cantly more likely to have spoken extensively to their parents about this subject than younger Gen Z children
– Although not shown on this chart, those who are good budgeters (67%) are much more likely to have had extensive discussions with their parents about saving money than others
Base: Gen Z (n = 1,001), 13- to 15-year-olds (n = 235), 16- to 18-year-olds (n = 333), 19- to 22-year-olds (n = 433), Parents (n = 1,000)
Have your parent(s)/guardian(s) ever spoken with you about saving money? Have you ever spoken to your child about saving money?
21
Budgeting Habits • Overall, 41% of Gen Z respondents say they have a budget and carefully follow it:
– Those who regularly follow their budget tend to be married females (66%), children who pay for their expenses (62%), those who are employed (56%), those who live without their parents (59%) and 19- to 22-year-olds (51%)
– Those who don’t know how to budget tend to be 13- to 15-years- old (11%) and those who have others paying for their living expenses (9%)
– A signi!cant proportion of 13- to 15-year-olds (28%) and 16- to 18- year-olds (22%) feel they are too young to have a budget, and 13% of Gen Z generally feel they don’t earn enough money to have one
Base: Gen Z (n = 1,001), 13- to 15-year-olds (n = 235), 16- to 18-year-olds (n = 333), 19- to 22-year-olds (n = 433)
Which of the following best describes you?
41
24
16 13
6
28
20
28
14 11
37
24 22
12 6
51
26
6 13
3
0
10
20
30
40
50
60
I have a budget and follow it carefully
I have a budget but don't really follow it that closely
I'm too young to have a budget
I don't earn enough money to have a budget
I don't know how to budget
% o
f Res
pond
ents
Gen Z 13- to 15-year-olds 16- to 18-year-olds 19- to 22-year-olds
22
Saving History: Amount Currently Saved • Overall, Gen Z have $300 saved so far, on average (median); however, the amount of
money saved is highly correlated with the degree to which a youngster is responsible for his or her own expenses – those who are more responsible for expenses have saved more:
– Age and “!nancial independence” are related but not 100% correlated – for example, 19- to 22-year-olds have an average (median) of $510 saved, whereas those who are independent/pay for most or all of their basic living expenses, have $1,200 saved on average
– Not surprisingly, those who claim to follow a budget regularly ($950 saved on average) have signi!cantly more savings than those who are poor budgeters/don’t budget at all ($100 saved on average)
Base: Gen Z (n = 1,001), Dependent (n = 551), Semi-Independent (n = 298), Independent (n = 152)
How much money have you put away for savings so far?
300
100
600
1,200
0
200
400
600
800
1,000
1,200
1,400
Gen Z Dependent (Someone else pays)
Semi-Independent (Shares expenses)
Independent (Pays themselves)
Ave
rage
(Med
ian)
in $
23
Savings: What Gen Z are Saving For
What, if anything in particular, are you saving for? (Note: Multiple responses allowed)
5
8
11
12
18
22
22
30
31
39
42
0 5 10 15 20 25 30 35 40 45
Other
Retirement
Wedding or other special life event
Nothing in particular
Home
Entertainment, not including vacation/travel/holidays
Vacation/travel/holidays
Computer, iPad, stereo, #at screen television, electronics
Car
Education/tuition/books, etc
Basic living expenses
% of Respondents
• Overall, Gen Z who are saving tend to be saving for basic living expenses (42%), education (39%), purchase of a car (31%) and electronics (30%); however, what is being saved for is dependent on age: – 19- to 22-year-olds are more likely to
be saving for basic living expenses (51%), vacation/travel/holidays (29%), for a home (24%) or for a wedding or other special life event (14%) than younger age groups
– 13- to 15-year-olds are more likely to be saving with no particular goal in mind (18%) than older age groups
Base: Gen Z who say they have saved more than $0 (n = 750)
24
Knowledge of Finances, Saving and Investments • Although there is room to learn, Gen Z and Parents both feel reasonably comfortable
with their knowledge about !nances, savings and investments – on average, Gen Z feels they would earn a modest grade of 64 out of a 100, if they were given a test on this subject:
– Parents agree and indicated that their Gen Z children would score, on average, 68 out of 100
– Parents feel signi!cantly more knowledgeable than Gen Z, believing, on average, that they would score 79 out of 100
Base: Gen Z (n = 1,001), Dependent (n = 551), Semi-Independent (n = 298), Independent (n = 152) Parents (n = 1,000)
If you/your child were given a “pop quiz” today about how much you know about !nances, saving and investments, what do you think your score out of 100 would
be?
64 68 59 62
67
79
0
10
20
30
40
50
60
70
80
90
Gen Z
Parents (How they think
child would score)
13- to 15-year-olds
16- to 18-year-olds
19- to 22-year-olds
Parents (Self)
Ave
rage
(Mea
n) S
core
out
of 1
00
25
Primary Sources of Financial Knowledge
Where have you learned the most about !nancial responsibility and money management?
1
1
2
2
2
3
3
4
7
11
17
46
0 20 40 60
Other
Blogs from experts
Social media
On TV or Video on Demand
Newspaper, magazine, book, etc.
Financial/bank website
Financial advisor/banking specialist
Friends
Not applicable - I have no knowledge in this area
On my own
Teacher/guidance counselor/at school
Parent(s)/guardian(s)/relative(s)
% of Respondents
• Almost half (46%) of Gen Z indicate they are learning about !nancial responsibility and money management from their parents: – A signi!cant minority also indicate they
are either obtaining knowledge from a teacher/guidance counselor/at school (17%) or on their own (11%)
– Few are learning about these subjects from friends, the media or !nancial websites
• 7% of Gen Z indicate they have no knowledge at all of !nancial responsibility and money management: – These are more often 13- to 15-year-
olds (14%) versus other older age groups (6%)
Base: Gen Z (n = 1,001)
26
What Gen Z Wants to Learn More About
Which one of the following things about money, if any, do you wish you/your child knew more about?
5
1
4
5
9
6
8
5
22
25
10
15
1
6
6
6
7
7
10
11
14
18
0 10 20 30
None of the above
Other
How to build a diversi!ed investment portfolio
Which saving and investment vehicles to use
How to establish a savings goal
How to establish a credit rating
How to manage debt
How much money I need to retire
How to budget so I can save
How to balance spending and saving
How to make savings grow
% of Respondents
Gen Z Parents • Gen Z and Parents agree on the top three things they wish they/their child knew more about: – How to make savings grow
– How to balance spending and saving
– How to budget in order to save
• Parents think “understanding balancing spending and saving” and “learning how to budget to save” are most important, whereas Gen Z wish they knew more about “how to make savings grow” !rst and foremost
Base: All (N = 2,001), Gen Z (n = 1,001), Parents (n = 1,000)
27
12 14
74
0
20
40
60
80
Yes Don't know No
% o
f Res
pond
ents
Gen Z Stock Purchases • Very few (12%) Gen Z indicate they have purchased stocks before – the strong majority
(74%) have not purchased any yet or don’t know if they have any (14%): – 19- to 22-year-olds, those who are employed either full time or part time during the academic year, Gen Z who
either pay for or share their expenses and “good budgeters” are signi!cantly more likely to have purchased stocks than others
Base: Gen Z (n = 1,001)
Have you ever purchased a share of stock?
28
Attitudes, Planning and Saving for Education
29
11 6 7
15
61
14
2 4
12
68
12 7
10
27
44
0
10
20
30
40
50
60
70
Very unimportant Somewhat unimportant Neutral Somewhat important Very important
% o
f Res
pond
ents
Gen Z
Importance for Gen Z child from Parent perspective How Parent felt at their Gen Z child's age
Importance of a Higher Education • The majority of Gen Z believe obtaining a higher education is very important in order for
them to be successful in the future:
– Parents strongly agree that a higher education is important for their Gen Z child and indicate a higher education is signi!cantly more important now than it was when they were young
Base: Gen Z (n = 1,001), Parents (n = 1,000)
How important or unimportant do you feel it is (for your child) to obtain a higher education in order to be successful in the future? How important was it when you were your child’s age?
30
18 19
63
16 18
66
0
10
20
30
40
50
60
70
Unlikely or won't Neutral Likely, will, in or have
% o
f Res
pond
ents
Undergraduate College (B.A., B.Sc.)
Graduate College (Master's, Ph.D., Doctor, Lawyer, Veterinarian, Chartered Accountant, Engineer, etc.)
Likelihood of Going to College • A majority of Gen Z plan to attend, are already in or have completed undergraduate or
graduate college. A signi!cant minority are unsure whether they will, are unlikely to or won’t pursue an undergraduate (37%) or graduate (34%) college degree:
– Those who say they are unsure whether they will, unlikely to or won’t attend college tend to be younger, already working, part-time students and those who are not responsible for paying their own expenses
Base: Gen Z (n = 1,001)
How unlikely or likely are you to pursue an undergraduate/graduate degree?
31
55 47
40
25 18
0
10
20
30
40
50
60
70
Assistance from parents
Assistance from scholarships, fellowships or
grants
Myself through working during college
Assistance from student loans
Assistance from grandparents/relatives
% o
f Res
pond
ents
Higher Education: How Gen Z Pays • Those who answered that they were somewhat or more likely to complete an
undergraduate or graduate college degree (i.e., 5 or more on a 7-point scale) were asked how they expected to pay for, are paying for or paid for their education.
• Most Gen Z children indicate their college education will be or was paid for by their parents (55%) – signi!cantly fewer believe they will have, are having or did have their college paid for by scholarships, fellowships or grants (47%), from working (40%), from student loans (25%) or through assistance from grandparents or other relatives (18%)
Base: Gen Z likely to, already in or who have completed undergraduate or graduate level college (n = 805)
How are you, do you expect to or did you pay for college?
32
58
39
3
0
10
20
30
40
50
60
Yes No Don't remember
% o
f Col
lege
Edu
cate
d P
aren
ts
43
57
0
10
20
30
40
50
60
Yes No %
of C
olle
ge E
duca
ted
Par
ents
Higher Education: Parents’ College Loans • A signi!cant proportion of Parents are still paying back their own college debt – 58% of
Parents indicate they took loans to pay for their own college education and, of these, 43% are still paying them back
• 51% of Parents who are still paying back their own college loans also have a 529 College Savings Plan to support their Gen Z child’s education
Base: Parents who went to college (n = 459) Parents who took loans to pay for their college (n = 265)
Did you take loans to pay for your own college education?
Are you still currently paying these loans back?
51% also have a 529 for
their Gen Z child
33
35 32
17 16
31 33
21 15
32 33
19 16
40
30
14 16
42 40
12 6
0
10
20
30
40
50
Yes, extensively Yes, somewhat Yes, not very much No
% o
f Res
pond
ents
Gen Z 13- to 15-year-olds 16- to 18-year-olds 19- to 22-year-olds Parents
Talking About Saving Money for College • Overall, 67% of Gen Z indicated their parents have spoken with them somewhat or
extensively about saving money for college: – Signi!cantly more 19- to 22-year-olds indicate their parents have talked extensively about saving money for college
than younger Gen Z children
– Signi!cantly more Parents (82%) indicate they have talked to their children about planning/saving money for college than Gen Z (67%) indicate they’ve talked to their parents about the subject
– Good budgeters, those who work part time during the academic year and those who pay or share their living expenses are more likely to have had extensive talks with their parents about saving money for college
– Although not shown on this slide, Gen Z indicates their parents have talked to them signi!cantly more about saving money in general (82% have talked about it) than for saving for college (67% have talked about it) – but they’ve talked about saving for college signi!cantly more than about saving money for retirement (38% have talked about it)
Base: Gen Z (n = 1,001), 13- to 15-year-olds (n = 235), 16- to 18-year-olds (n = 333), 19- to 22-year-olds (n = 433), Parents (n = 1,000)
Have your parents ever spoken with you (have you spoken to your child) about saving money for college?
34
37
36
45
46
64
23
29
35
36
50
0 10 20 30 40 50 60 70
I considered/am considering/delayed/going to college due to how expensive it is/was
Top tier university is worth the cost because it prepares students better than state/community schools
Top tier university is worth the cost as its reputation helps secure employment
University prepares students better for the workforce than technical school
Going to college in general is worth the cost as it helps secure employment
% of Respondents Agreeing (Top 4 points on an 11- point scale)
Gen Z Parents
To what extent do you agree or disagree with each of the following statements?
• Respondents were asked to indicate the degree to which they agree or disagree with each of the following statements on an 11-point scale ranging from “0 - strongly disagree” to “10 – strongly agree.” The following chart shows the percent of respondents who agreed with each statement (i.e., answered 7, 8, 9 or 10): – Gen Z and Parents disagree about the importance of a “big name” college education. Gen Z are less sure it will
help secure employment or that it provides a better preparation than state/community schools
– Gen Z are also signi!cantly less concerned than parents that they will delay college due to its cost
– Gen Z may need a wakeup call
Attitudes Toward College Education
Base: Gen Z (n = 1,001), Parents (n = 1,000)
35
52
22 16
6 4
30 20
25 18
7
0
10
20
30
40
50
60
70
Never heard of them before today
I've heard the name only I know a little I know a fair amount I know a great deal
% o
f Res
pond
ents
Gen Z Parents
Knowledge of 529 College Savings Plans • The majority of Gen Z (74%) have never heard of a 529 College Savings Plan (52%) or are
only familiar with the name (22%) – Those living with their parents and those under 19 years old are signi!cantly less likely to have heard about 529
College Savings Plans than others
• A surprising proportion of Parents, almost half (49%), have never heard of a 529 College Savings Plan (30%) or only know the name (20%) – Parents from lower-income households (i.e., under vs. over $100K per year) and those with less than college
educations are more likely NOT to have heard of them
Base: Gen Z (n = 1,001), Parents (n = 1,000)
Which of the following best describes how much or little you know about 529 College Savings Plans?
36
Talking About 529 College Savings Plans • Parents were asked if they have spoken to their Gen Z children speci!cally about 529
College Saving Plans: – Not surprisingly, based on the number of Parents who weren’t aware of 529 College Savings Plan, only 39% of
Parents indicate they have spoken to their child “extensively” (15%) or “somewhat” (24%) about 529 College Saving Plans
– The majority of Parents (61%) indicated they have either not talked to their children at all (43%) or have not talked to them very much (18%) about 529 College Savings Plans
Base: Parents who didn’t say they had not heard about 529 College Savings Plans before the survey (n = 706)
Have you ever spoken with your child about 529 College Savings Plans?
15
24
18
43
0
10
20
30
40
50
Yes, extensively Yes, somewhat Yes, not very much No
% o
f Res
pond
ents
37
32
68
0
10
20
30
40
50
60
70
Yes No / Don't know
% o
f Res
pond
ents
529 College Savings Plan Usage • Only 32% of Parents indicate they have a 529 College Savings Plan or other account to
save or invest speci!cally for college for their child, which further suggests the importance of informing the public of the existence and potential bene!ts of these types of products
Base: Parents (n = 1,000)
Do you/did you have a 529 College Savings Plan or other college savings account for your child?
38
59 58
44 41
13
0
10
20
30
40
50
60
70
Assistance from parents
Assistance from scholarships,
fellowships or grants
Assistance from student loans
Child will pay through working during college
Assistance from grandparents / relatives
% o
f Res
pond
ents
Higher Education: How Parents Intend to Pay • Parents who have a child that is not in college and who do NOT have a 529 College
Savings Plan were asked how they expect to pay for their Gen Z child’s education should they end up going to college
• Most parents believe college will be paid for by themselves (59%) and through assistance from scholarships, fellowships or grants (58%) – a signi!cant minority also believe assistance will come from student loans (44%) and from their child working (41%)
– Very few parents believe funding for their Gen Z child’s education will come from their child’s grandparents or other relatives
Base: Parents whose Gen Z child is not in college and who do not have a 529 College Savings Plan for their child (n = 589)
If your child ends up going to college, how do you expect his/her college education will be paid for?
39
25 30
37 41
56 62
66 70 71
82 85 90 92 95 97 98 98 98 98 99 99 100
20
30
40
50
60
70
80
90
100
1 year old or
less
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Cum
ulat
ive
% o
f Res
pond
ents
529 College Savings Plan: When Saving Started • Parents of Gen Z who said they have a 529 College Savings Plan were asked how old their
child was when they !rst started contributing to it – 82% of Parents indicate they started by the time their child was 10 years old, 56% by the time their child was 5 years old (which was also the average/median age started): – When asked when they would have liked to start contributing to a 529 College Savings Plan for their child, Parents
said they would have liked to start three years earlier, on average (median)
Base: Parents who have a 529 College Savings Plan for their child (n = 284) Parents who started saving after a child’s !rst birthday (n = 187)
Age of child When Parent First Started Contributing to a 529 College Savings Plan
40
Attitudes, Planning and Saving for Retirement
41
43
35
37
32 26
39
71
61
51
36
23
16 0
20
40
60
80
You can never start saving too early for retirement
I/my child will not be able to count on Social Security when
I retire so I need to save myself
When I think about retirement it means I will no longer be
working for money
I have/my child has too many other priorities to start thinking
about retirement
I am/my child is too young to start saving for retirement
I/my child will have an inheritance so I don't need to
worry about saving for retirement
Gen Z Parents
To what extent do you agree or disagree with each of the following statements?
• Gen Z and Parents have very different ideas with respect to retirement: – Respondents were asked to
indicate the degree to which they agree or disagree with each of the following statements on an 11-point scale ranging from “0 – strongly disagree” to “10 – strongly agree.” The following chart shows the percent of respondents who agreed with each of the statements (i.e., answered 7, 8, 9 or 10).
– Signi!cantly more Parents than Gen Z believe you can never start saving too early for retirement and that social systems will have collapsed by the time Gen Z is ready to retire.
– Signi!cantly more Gen Z indicate they don’t need to save for retirement as they are expecting an inheritance.
– Signi!cantly more Parents believe retirement means they will no longer be working.
Saving for Retirement: Attitudes
Base: Gen Z (n = 1,001), Parents (n = 1,000)
Note: More Gen Z who are under 19 years old feel this
way – more Parents feel under 19 years old is too
young as well
42
17 21
18
44
11 17
20
52
18 21
16
45
19 24
19
38
18
31
22
29
0
10
20
30
40
50
60
Yes, extensively Yes, somewhat Yes, not very much No
% o
f Res
pond
ents
Gen Z 13- to 15-year-olds 16- to 18-year-olds 19- to 22-year-olds Parents
Talking About Saving Money for Retirement • 38% of Gen Z indicate their parents have spoken with them somewhat (21%) or
extensively (17%) about saving for retirement; signi!cantly more Parents (49%) indicate they have had discussions of this nature with their children:
– As with other discussions about saving and !nances, discussions of this nature are signi!cantly more likely to occur with older children than younger ones
– Although not shown on this slide, Gen Z indicates their parents have talked to them signi!cantly less about saving for retirement (38% have talked about it) than about saving money in general (82% have talked about it) or saving for college (67% have talked about it)
Base: Gen Z (n = 1,001), 13- to 15-year-olds (n = 235), 16- to 18-year-olds (n = 333), 19- to 22-year-olds (n = 433), Parents (n = 1,000)
Have your parents ever spoken with you (have you spoken to your child) about saving money for college?
43
25
21
0
5
10
15
20
25
30
Gen Z Parents
Ave
rage
(Med
ian)
Age
Saving for Retirement: When You Should Start • Gen Z believe they should start saving for retirement at age 25, on average (median).
Although not that much different from Gen Z, Parents indicate children should start saving for retirement at age 21 on average (median), four years earlier than what Gen Z believes:
– 16% of Gen Z and 8% of Parents do not know what age you should start staving for retirement.
– More than half of Gen Z (54%) have not started saving; those who have started saving (46%) for retirement have accumulated $3,000, on average (mean), and those who have started tend to be 19 to 22 years old and “good budgeters”.
At what age do you think you should start saving for retirement?
Base: Gen Z (n = 835), Parents (n = 919) who didn’t say “don’t know”
44
14 9
77
0
20
40
60
80
Yes Don't know No
% o
f Res
pond
ents
Saving for Retirement: Custodial IRAs • Relatively few Parents (14%) have custodial IRAs for their children:
Base: Parents (n = 1,000)
Do you have a custodial IRA account open for your child?
45
26 29 29
10 6
37
28
22
6 7
31 30 28
7 4
16
28
35
14
7
0
5
10
15
20
25
30
35
40
Never heard about it before today
I've heard the name only I know a little I know a fair amount I know a great deal
% o
f Res
pond
ents
Gen Z 13- to 15-year-olds 16- to 18-year-olds 19- to 22-year-olds
Knowledge of 401(k) • 45% of Gen Z indicate they know a little (29%), a fair amount (10%) or a great deal (6%)
about 401(k):
– Although not shown on this chart, these results are in agreement with the !nding that 44% of Parents have discussed 401(k) with their children.
– Not surprisingly, more 19-to 22-year-olds (56%) indicate they know a little (35%), a fair amount (14%) or a great deal (7%) about 401(k).
Base: Gen Z (n = 1,001), 13- to15-year-olds (n = 235), 16- to 18-year-olds (n = 333), 19- to 22-year-olds (n = 433)
Which one of the following statements best describes how much or how little you know about 401(k)?
46
26
35
25
9 5
39
33
19
7
2
30
36
22
9
3
16
36
30
11 7
0
5
10
15
20
25
30
35
40
45
Never heard about it before today
I've heard the name only I know a little I know a fair amount I know a great deal
% o
f Res
pond
ents
Gen Z 13- to 15-year-olds 16- to 18-year-olds 19- to 22-year-olds
Knowledge of IRAs • More than 25% of Gen Z haven’t heard about IRAs:
– Older children know more about them than younger ones, as with other !nancial issues.
– Only 18% of 19-to 22-year-olds indicate they know a fair amount or a great deal about IRAs/custodial IRAs.
– Although not shown on this slide, just more than one-quarter (27%) of Parents indicate they have discussed IRAs with their child either extensively (9%) or somewhat (18%); more than half (55%) have never discussed IRAs or custodial IRAs with their Gen Z child.
Base: Gen Z (n = 1,001), 13- to15-year-olds (n = 235), 16- to 18-year-olds (n = 333), 19- to 22-year-olds (n = 433)
Which one of the following statements best describes how much or how little you know about IRAs? Which of the following statements best describes how much or how little you know about custodial IRAs?
47
Appendix: Study Sample Characteristics
48
5
16
25 22
12
20
0
5
10
15
20
25
30
New England Mid-Atlantic South Midwest Southwest West
% o
f Res
pond
ents
Study Sample Characteristics
Base: All respondents (N = 2,001), Gen Z (n = 1,001), Parents (n = 1,000)
Region
45 41
14
0
10
20
30
40
50
Employed Students Unemployed
% o
f Res
pond
ents
Employment Status
24 33
43
0
10
20
30
40
50
13 to 15 years old 16 to 18 years old 19 to 22 years old
% o
f Gen
Z G
roup
Gen Z Age Groups
11
74
15
0
20
40
60
80
Gen Y Gen X Baby boomer
% o
f Par
ent G
roup
Parent Generations
69
6 17
8
0
20
40
60
80
High school or less
Technical degree
University degree or more
Prefer not to answer
% o
f Gen
Z G
roup
Education of Gen Z
30 21
46
3 0
20
40
60
80
High school or less
Technical degree
University degree or more
Prefer not to answer
% o
f Par
ent G
roup
Education of Parents
49