The next generation of Americans will be healthier, their parents say, all except for their finances.
Barely more than one in 10 (13%) American adults believe their children will be better off financially than they were when their career reached its peak and just over half (52%) believe their children will have less disposable income than they did in the future, according to a survey of more than 1,100 American adults released Wednesday by life insurer Haven Life and research firm YouGov. What’s more, just 20% of Americans believe their children will have a better quality of life when they reach their age.
“For the baby boomer generation, pocket money from mom and dad was only part of their early childhood,” says Yaron Ben-Zvi, co-founder and chief executive of Haven Life. “Today’s parents are increasingly prepared to worry about and provide for their children’s financial well-being well far into their adulthoods.” (In fact, 40% of millennials say they get some kind of financial help from their parents, according to an April 2015 Bank of America/USA Today survey of 1,000 kids and 1,000 parents.)
Why do parents believe that their children are faced with bigger financial challenges? They are saddled with more student loan debt than previous generations. The number of borrowers who default (those who are at least nine months past due) rose to 1.2 million annually in 2012 from around 500,000 per year a decade ago, according to the Federal Reserve Bank of New York. And many young people — especially those living in big cities — are still priced out of the housing market.
Studies also show that the better start children have in life in terms of financial support and education, the more likely they are to surpass their parents’ earnings. Children raised in low-income American families are more likely to have very low incomes as adults, while children raised in high-income families can anticipate a much bigger jump in income, according to a report — “Economic Mobility in the United States” — released last month by researchers at Stanford University.
Their future is brighter in one way, parents say. Two thirds (66%) believe their kids will be as healthy or have a healthier lifestyle and, as such, will have a higher quality of life, the Haven Life/YouGov survey also found. Some 81% of millennials exercise regularly versus 61% of baby boomers, and millennials take more fitness classes, according to research group Nielsen. Unlike many of their parents, they’re also growing up in a country where smoking is banned by 36 states in workplaces, restaurants and bars.
Despite their parents’ concerns, millennials —those born between 1981 and 1996 — appear to be more optimistic about their own future. Relative to every other age group, they’re most likely to say their situation has improved relative to a year ago, according to a recent study by personal finance site Bankrate.com. In all components of the site’s financial security index — savings, debt, net worth, overall finances, and job security — millennials were the most likely of all age groups to note improved conditions versus a year ago.
Written by Quentin Fottrell of MarketWatch