Among all current generations, Generation Xers have faced some of the toughest cultural and financial headwinds, but they have found a way to get things done, according to 2018 NAPA 401(k) Summit keynote speaker Neil Howe.
Howe – a best-selling author and renowned authority on generations in America – offered a fascinating and humorous look at the generations for the past 100 years, providing insight on who they are, what motivates them and how it impacts their financial decision-making. Currently Managing Director of Demography with Hedgeye Risk Management, Howe also is known for coining the term “Millennial Generation” along with William Strauss, who coauthored several books with Howe.
From the so-called Greatest Generation on up to Millennials, Howe expounded on their “coming of age priorities, attitudes toward the establishment, and workplace reputation.” According to Howe, much of their viewpoints and beliefs were shaped by major events and turning points that occurred during each generation, such as the Great Depression and World War II, the cultural wars of the 1960s, the war on terror and the financial crisis, as well as the post-financial crisis era.
[caption id="attachment_81087" align="alignright" width="300"] Keynote speaker Neil Howe addresses the crowd at the 2018 NAPA SUMMIT.[/caption]
And in explaining how these events shaped their attitudes, Howe brought the conversation back to how each generation has its own unique perspective on financial planning and retirement, and how marketing and advertising have changed throughout the decades to target each generation’s uniqueness.
“The point of this is to say that these different moods here say something very important about the message you respond to, the products that you buy and the candidates that you vote for,” Howe noted, adding that “… it says something to how do speak to different generations about preparing for the next phase of life.”
Interestingly, Howe implied that he is most worried about Generation Xers, who came of age during the decline of defined benefit plans and have not had as much time to save in a DC-led environment. They are also the generation with the most unequal levels of income and wealth than any generation alive today and they were also the generation that got hurt the most during the financial crisis, Howe notes.
Howe referred to them as the “lost generation” and “baby busters,” who, as a group, feel like they don’t belong in their respective generation. He also dubbed them the generation of “13,” alluding to the apparent “bad luck” their generation faced while growing up, such as an increase in the divorce rate, lower birth rate and a changing culture that turned unfriendly to children. Their coming of age was shaped by parents with an attitude of “let them raise themselves,” Howe noted.
Possibly as a result of this dynamic, he also notes that they are more comfortable than any other generation in taking risks to get ahead. They prioritize individualism and an attitude that “we can get along” without the establishment, with a fallen trust in institutions. Generation Xers are also more accepting of 401(k) plans, but they also have a workplace reputation as not necessarily trusting their employer with the attitude of wanting to cash out and manage their own risk.
The appeal for Generation Xers is getting things done and delivering on the bottom line, according to Howe. He points out how these attitudes have helped shaped marketing campaigns towards “personal empowerment,” such as Nike’s “Just Do It” or Prudential’s “Own a Piece of the Rock.”
In turn, Generation Xers, growing up as the under-protected generation, have become the parents of raising over-protected kids, who are now known as the Millennials. Howe referenced the book he wrote with William Strauss – Millennials Rising: The Next Great Generation – to help explain how the generation has turned out to be so dramatically different from their parents’ generation. He noted they focus more on family values and taking care of their kids and parents.
One major change among the generation, he explained, as compared to 1990s for example, is a decline in personal risk-taking. They want to be part of the middle class, but many are avoiding the stock market because they perceive it as being “too volatile.” They are also the most stressed generation, constantly wondering whether they’re doing okay.
Millennials are also reversing the Generation X attitude of “leave me alone” to a protectionist attitude of wanting benefits and help with doing things, such as 401(k) orientation sessions and financial planning assistance.
At the same time, Millennials have an emerging peer personality trait that they are “special,” as the generation feels that it’s worthy to themselves, which in some regards, has led to a sense of callousness emerging among other generations towards Millennials.
Howe suggests turning that trait on its head and leveraging the positive self-esteem as an advantage, such as how employers approach Millennials, suggesting that they expect “special things” from them. In addition, he suggests that advertising should be focused on positive messaging.
Howe also cites the emergence of several multibillion industries that did not exist in the 1970 as a major change agent, with one of the largest being the advent of social media. He notes that Millennials grew up with social media and are comfortable with everyone looking at them and following them, but that also seems to be making them more risk averse.