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Millennials Segment Summary February 2013

Source: 2012–13 MacroMonitor

Millennials—adults between the ages of 18 and 34 (1977–94) are of interest to financial-services providers because they are entering a life stage when more-than-basic financial products and services are necessary. Millennials represent 32% of all US adults (roughly 73 million), according to Spring 2012 GfK MRI data; one-third live with one or more parents. This summary focuses on the 30 million Millennial-headed households; their number has grown rapidly from about 5 million in 2002 to 30 million in 2012 (see the February 2013 MacroMonitor Market Trends newsletter). Financial-services providers appear to be tepid about wooing these households. A reasonable effort to attract Millennial-headed households now will prevent more expensive acquisition efforts in the future.


Similar in size to the Baby Boomers group, Millennials are a diverse group.

  • Three in five primary household heads are between the ages of 30 and 34; their mean age is 30.
  • Both mean ($63K) and median ($41K) annual household incomes are lower than average; in 2011, 43% had an annual household income of less than $50K.
  • Almost two in five household heads have a four-year college degree or more—higher than for Gen X or Boomer cohorts.
  • Fewer than half (46%) are married; 12% live together. Millennial heads are significantly more likely than average to be single or to be living together. However, 48% of Millennial-headed households support dependent children.
  • They are almost twice as likely as average to live in an apartment; 54% are renters.
  • About one-quarter live in the suburb of a large city; another quarter live in a medium-size city.

Products and Services and Financials

As the youngest group of consumer households, Millennials—no surprise—have below average savings, assets, home equity, and net worth. They also have below-average liabilities—for many, the result of their lack of a credit history.

  • More than two in five have no financial strategy.
  • Product ownership, such as ownership of checking and savings accounts and US Savings Bonds, is average. They are below average in owning sophisticated savings and investment vehicles; only 29% have any type of investment account.
  • They are average for having a first mortgage (37%), a vehicle loan (35%), and a credit-card balance (45%) but almost half again as likely as all households to have a consumer loan (34%).
  • For the majority, retirement is far away—only one-third are preparing. The mean amount they hold in retirement products is $42K, in comparison with $171K for all US households; 43% have a 401(k), 403(b), or 457 plan.
  • They are insurance light, although 59% believe that life insurance is a good way to save for the future; 52% would prefer to buy through payroll deductions.
  • They are most interested in obtaining a first mortgage.
  • Some 23% have education loans—more than twice the national average.

Financial Attitudes That Differentiate Millennial-Headed Households

Millennial-headed households are in acquisition mode. Their optimism about life is somewhat dampened by financial reality. The majority (77%) plan to make a special effort to spend less in the coming year.

  • Because the majority are financially constrained, many shop around, looking for the lowest-cost provider of commodity products such as checking accounts.
  • One-half don't care if financial-services providers know them by name; the same proportion aren't interested in chatting with people they know at institutions.
  • Three in five would rather use a direct channel then have a personal interaction.
  • Two in five agree they need help in managing their financial affairs.

Interesting Tidbits

Millennials are more ethnically diverse than any previous age cohort. They are optimistic, digitally savvy, Facebook friendly, and negatively affected by the 2008 Recession. Somewhat more than half are financially constrained.

  • One-third struggle to make ends meet: 11% require assistance.
  • Gen Xers (52%) are more likely than Millennials (47%) to feel as though they are living on the edge, paycheck to paycheck.
  • Many look for ways to increase current income and, at present, prefer high gains over safe investments.
  • Over half are willing to obtain products and services from their employer's retirement-plan provider; the majority prefer to purchase through payroll deductions.
  • They prefer banks and credit unions for information and advice.
  • Over half are not interested in learning more about any financial topic. Those who are interested are more likely to use new media than traditional media; two-thirds don't use any financial-information sources.
  • Some 9% are US military veterans.


A stark contrast exists between "have" and "have-not" Millennial-headed households. Two in five live in the present and, as yet, are not thinking about their financial future. As their financial needs become more complex, they may learn to appreciate the value of personal relationships; remember, many are used to "unfriending" with impunity. They may continue to perceive that all financial products are commodities best purchased on the basis of price. Financial-services providers that are ultimately successful with Millennials will need to learn how to provide new value—such as customizable product features, instant access, and seamless access across channels—to attract the next generation of customers.

For more information, contact CFD.