Article: ‘Fast Forward’ : 34% of millennials have kick-started retirement savings already


‘Fast Forward’ : 34% of millennials have kick-started retirement savings already

The everyday behaviour of millennials across a variety of topics like investments, savings, tax returns, retirement plans and new-age alternative assets, among other issues, throws up some key insights, as per the Financially Independent Millennial Report by AI-driven financial wellness platform CASHe.
‘Fast Forward’ : 34% of millennials have kick-started retirement savings already

Millennials are rapidly evolving as ‘forward thinkers’.

While boomers are either into retirement or nearing it, millennials have plenty of time to plan and save, but there is a growing consciousness among them to start this process early for their post-retirement life.

More than 34% of millennials say they are highly conscious of the matter and have started saving already whereas close to 48% of the respondents said they have not yet factored in retirement planning but a considerable chunk of them (23%) aim to kick-start retirement planning soon.

These are the findings of recently released ‘The Financially Independent Millennial’ report 2022 by AI-driven financial wellness platform CASHe.

According to the survey, more than 43% of the respondents across the country stated they started making financial decisions independently between the ages of 21-25 years.

Conducted among more than 20,000 customers on the CASHe platform as well as on its newly acquired wealth management platform,  Sqrrl, the pan-India survey witnessed the participation of millennials from more than 80 cities and captured their preferences and attitudes towards finance and investment matters.

As millennials are evolving and growing to take on additional financial commitments, there is a growing realisation among the cohort for responsible investing.

As part of their preference for ongoing investment and growth, millennials are eyeing to ace financial discipline and regularity with over 47% of respondents expressing their penchant for SIP/recurring deposits as their preferred investment pattern followed by 31% of respondents who favoured goal-based savings.

Although young millennials may not have much to put aside, the study indicates that they are aiming to adopt smart savings habits. Also, the cohort’s inclination towards SIP and goal-based investment plans implies their commitment to regular savings.

With millennials growing increasingly wary about money matters post-pandemic, the study indicated that a vast majority of the respondents (41%) set aside a budget of anywhere between 10-20% of their annual income as savings.

The data showcased the growing trend of millennials adopting responsible financial behaviour at an early age. However, in contrast it also stated that a considerable chunk of millennials (around 30%) set aside less than 10% of their annual income as savings which raises concern in regard to the cohort committing to regular savings.

“Millennials – the first generation to be known as digital natives, have made technology an integral part of their everyday life and therefore, money management too is no exception. As the country’s largest workforce, millennials are driving a paradigm shift in the wealth-management industry. The cohort is seeking new-age offerings at the intersection of technology and innovation that help them pursue a custom-fit journey that suits their investment appetite and goals. The survey clearly showcases how millennials today are rapidly evolving as investors, borrowers, and wealth creators,” said V Raman Kumar, founder chairman, CASHe.

Millennials are increasingly turning to digital alternatives and prefer to do their investments themselves. In terms of preference for new-age alternative asset classes, digital gold topped the charts with more than 33% of the respondents voting for it. This was followed by cryptocurrency (29%), fractional ownership (17%), P2P lending (12%), and US equity investment (9%).

With increasing awareness about tax saving modes and avenues, millennials are joining the clique of savvy investors who look at both future returns and present tax savings. According to the survey, more than 56% invested in tax saving plans, while the rest were supposedly unaware.

Millennials have faced the most uncertain economic future of the generation since the onset of the pandemic, and a majority of them have grown to become more cautious about finances amid it.

According to the report, medical emergencies, accounting for 36%, was the top reason for millennials availing loans in 2022. This was followed by unplanned expenditure and education accounting for 19% and 14%, respectively.

The report also highlighted that banks continue to lead the stride as the most preferred go-to lending avenue among millennials. The survey highlighted that 41% of millennials secured loans from a bank whereas 35% of the borrowers opted for a digital lending platform. Owing to the relaxed eligibility criteria, bias-free processes, and attractive interest rates, lending platforms are rapidly gaining popularity among millennials.

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Topics: Others, #Wellbeing

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