Gen Y -- people in their 20s and early 30s -- had a rough time of it during the Great Recession.
According to a Pew Research Center survey in 2012, 49 percent of Gen Y said they were forced to take a job they didn't want just to pay the bills. About 35 percent gave up on the job hunt and went back to school. Nearly a quarter -- 24 percent -- moved back with Mom and Dad because they couldn't hack it on their own, and 20 percent said they postponed getting married because they thought they couldn't afford it.
While all this financial pain has put some members of Gen Y behind the curve, a new study by Fidelity Investments paints a more positive picture for members of Gen Y between the ages of 25 and 32. For those who bucked the trend, landed good jobs and opened investment accounts during the meltdown, the future looks rosy.
John Sweeney, executive vice president of retirement and investment strategies at Fidelity, calls this successful segment "Generation optimistic." Some 81 percent told Fidelity the experience of living through the recession left them more knowledgeable about finances and 55 percent said it has made them confident investors.
Sweeney points out that this generation has seen firsthand the investment value of dollar-cost averaging. About 39 percent overcame the fears acted on by older generations and increased contributions to their 401(k)s or other investment accounts when the market was down. They have since watched the value of their holdings soar. This generation also has been the most willing generation to take advice, with 37 percent turning to friends and family, 34 percent researching online, and 23 percent using online tools and calculators.
Probably because so many members of Gen Y watched the retirement planning of their boomer parents unravel, this generation is focused on retirement. Over the last five years, 39 percent have increased their contributions to a tax-advantaged retirement savings account, with 32 percent saving more in a 401(k) and 21 percent putting money in an individual retirement account.
As the parent of four Gen Y adult children who have not been as financially focused or as economically successful as these young adults, I found this report to be encouraging news. Maybe there is hope for the rest.