Confidence in Managing Financial Future Lacking at All Ages

WASHINGTON, D.C. — Across the U.S. and Canada, older adults are more confident than younger adults in their ability to manage their current financial needs. However, in both countries, confidence in managing future finances differs less by generation.

The percentage of U.S. adults expressing a great deal of confidence in their ability to manage their current financial needs increases from 25% of Gen Z adults to 31% of millennials, 38% of Gen X adults and 54% of baby boomers. Canada shows a similar pattern, rising from 14% of Gen Z adults and 17% of millennials to 30% of Gen Xers and 43% of baby boomers.

When it comes to managing future financial needs, older adults’ confidence more closely resembles that of younger adults. Just 26% of Gen X adults in the U.S. and 24% in Canada express a great deal of confidence in managing their future finances, little different from the two younger generations. Baby boomers remain more confident than younger generations in both the U.S. (37%) and Canada (32%) but are less confident in managing their future financial needs than their current ones.

These results are from the Edward Jones/Gallup Money and Meaning: Understanding Financial Fulfillment study, which interviewed more than 5,000 U.S. adults and over 2,000 Canadian adults, aged 21 and older, in March and April.

Among Gen Xers, the birth cohort nearing retirement age, uncertainty about managing future finances is reflected in their perceptions of retirement savings. Even though 59% of U.S. and 50% of Canadian Gen X adults report having a financial plan for retirement, 39% of Gen Xers in the U.S. and 44% in Canada worry about whether their current and future savings will last. This concern about their savings is more common among Gen X adults without a retirement plan (59% in the U.S. and 63% in Canada) than among those who have a retirement plan (25% in the U.S. and 26% in Canada).

Among Gen Xers in both countries, only about one-fifth say they have a great deal of control over their financial future. While having a retirement plan is associated with a greater sense of control over future finances, only about a third of Gen X adults with a retirement plan (31% in the U.S. and 33% in Canada) report having this degree of control.

Financial Priorities Differ by Life Stage

The survey finds that all generations highly value financial security. Between 67% and 77% across all generations in both countries indicate that being financially secure is among their most important financial priorities. In fact, that is the core financial value that ranks first for all generations in both countries, ahead of other values like managing money responsibly, having financial freedom and making a difference with their money.

When asked separately about their current specific financial goals, all generations list “having income for a healthy lifestyle” among their top priorities. Beyond that, goals are more aligned with life stage. Younger adults in the U.S. and Canada place greater emphasis on increasing income and building wealth, while adults approaching retirement age prioritize saving for retirement.

• More than six in 10 Gen Z and millennial adults in the U.S. and Canada say that increasing household income is a very high or high priority for them, compared with less than half of Gen X adults and fewer than one in four baby boomers.
• Significantly more younger adults than older adults in both countries also prioritize saving for a home.
• In contrast, Gen X adults are far more likely than Gen Z adults to prioritize saving for retirement (62% vs. 39% in both countries).
• In the U.S., Gen X adults are also more likely to place greater emphasis on increasing the return on their savings.

Differing financial priorities by generation likely reflect different life stages, with retirement savings taking on greater importance for those nearing retirement age and being a less pressing concern for those decades away from retirement. Instead, younger adults are more focused on building wealth, something that people in later life stages have had more time to accumulate.

Building Wealth Corresponds With Feeling More Financial Pressure

Consistent with younger adults’ lower confidence in managing their current finances, they are also more likely to report experiencing financial stress regularly. In the U.S., 53% of Gen Z adults say they always or often experience stress when thinking about their finances, compared with 35% of Gen Xers. There is a similar pattern in Canada, with 48% of Gen Z versus 35% of Gen X adults experiencing financial stress.

Millennials report similarly high levels of financial stress, suggesting that these pressures extend beyond Gen Z as adults approaching middle age continue to work to build income, accumulate wealth and reach major financial milestones.

Baby boomers, most of whom are retirement age or older, are much less likely to feel financial stress.

Younger adults' financial experiences reflect the challenge of building wealth while managing current financial demands. These demands influence how they approach work.

One-third of employed U.S. Gen Z adults and 42% of Canadian Gen Z adults say they are working more hours than they would like in order to increase their income, compared with 24% and 23% of Gen X adults, respectively.

Younger adults also report making trade-offs more broadly. About one in five U.S. Gen Zers and three in 10 Canadian Gen Zers say they are sacrificing other values and priorities to meet their financial goals, nearly double the rate of Gen Xers and roughly three times the rate of baby boomers in both countries.

Money also occupies a larger place in daily life for young adults. One-third of U.S. and 42% of Canadian Gen Z adults say their finances “always” or “often” control their lives, compared with 21% of U.S. and 30% of Canadian Gen Xers, as well as 13% of U.S. and 17% of Canadian baby boomers.

Implications

Financial priorities evolve as people experience major transitions throughout adulthood, though some core goals such as financial security remain priorities for all age groups. Younger adults are focused on building the income and assets needed to reach milestones, and many are absorbing the cost of that effort through longer hours and more frequent financial stress.

For older adults, the challenge shifts from accumulating wealth to determining whether it will provide lasting financial security. Although adults approaching retirement age are more confident in managing their current finances, they still lack confidence in their future finances and whether their savings will last. In addition to life stage, accumulated wealth and wisdom may explain many of the differences in how people experience their finances, primarily seen in baby boomers’ greater confidence in their current and future finances and reduced financial strain.

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Learn more about how the Edward Jones Financial Fulfillment study works. Learn more about how the Gallup Panel works.