U of A study shows millennials tailoring retirement plans to climate change
A new University of Arizona study finds an emerging trend of millennials reevaluating their retirement plans due to uncertainties related to climate change.
Fifty participants, ages 26 to 41, were interviewed over Zoom. The study was led by Marissa Hettinger, a graduate student in the Norton School of Ecology of UA’s College of Agriculture, Life and Environmental Sciences, who is studying human development and family science.
“Millennials are the first generation to reach retirement-savings-age amid the climate crisis,” Hettinger said in a UA news release. “As a millennial myself, I was interested in understanding how we think about preparing for the future and how climate change impacts our choices. … When our parents and the generations before them set up their 401k and Roth IRAs, they weren’t necessarily thinking about the impacts of climate change when they reach retirement age.”
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The participants were asked numerous questions about their perceptions, behaviors and emotions about financial planning in the context of climate change and potential “climate stress.” All the interviews were then sifted to identify prevalent themes and shared points of view.
Emotions from fear to hope were expressed. At one end, participants predicted worsening climate conditions would lead to “hesitation or apathy” about financial investments. At the other, they said they were hoping for sustainability, government action and community initiatives in the future.
Parenthood was an important distinction — participants with children projected more anxieties about future climate change and wanted to be more deliberate in investing in their children’s futures.
Their approaches to retirement planning and financial security for their families include investing in sustainable funds or companies with strong environmental, social and governance practices, as well as supporting community-oriented strategies or local government initiatives that bolster climate resilience.
Participants wish for a greater level of transparency and guidance from employers, financial advisors and policymakers about accessible options for environmentally conscious financial planning.
The findings have been published in the Journal of Family and Economic Issues.
Researchers Hettinger, associate professor of retailing and consumer science Sabrina Helm and graduate student Kealie Walker, acknowledged the small size of the research pool; that the participants were mostly millennials with a certain level of financial education and engagement; and that the pool didn’t include diversity of perspectives, according to the UA news release.
“We expected there to be a group of people who see climate change as a reason to save more, while others want to use their resources now and enjoy life,” Helm said. “But I was happy to see proactive coping strategies in their savings behavior. We are generally more concerned about millennials, because they tend to have lower retirement savings than other generations before them. Financial literacy, particularly among younger people, is comparatively low.”
The researchers intend for their future studies to also focus on Gen Z and Gen X, and to take into consideration different cultural and socio-economic factors.
Reporter Prerana Sannappanavar covers higher education for the Arizona Daily Star and Tucson.com. Contact her at psannappa1@tucson.com or DM her on Twitter.
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