“Mum, we’re never going to be able to buy a house. I’m going to have a huge car payment the next time I have to buy a car. We’re never going to get there. We’re never going to dig our way out.”
This scary quote from a young adult is cited by a 63-year-old single parent in Texas, who “retired” about a year and a half ago but then went back to full-time work to help support her Gen-Z children.
As reported on Business Insider, it’s part of a growing trend: the mother, identified as Jane, “hadn’t originally budgeted for supporting her 20-something children during her retirement years. Jane had assumed that they’d be grown-ups making their own way; instead, like other young adults across the country, they’re struggling to stay afloat without her assistance as they go to college. Her daughter has cycled through service jobs, and her son lives with her.”
Jane tried to meet the need with some part-time work but that didn’t produce enough. She’s “coming up against a multi-generational financial strain and needs more of a buffer.” Otherwise she was “risking running out of money before I died.”
This isn’t a one-off story. The article cites a Pew Research Center survey, conducted from October to November, 2023: “Most young adults ages 18 to 34 aren’t completely financially independent from their parents.” That’s in spite of the fact that, compared to that same age group 30 years ago, they are “much more likely” to be college graduates and much more likely to be working full-time. “Even so, 57% are living with their parents.”
Over half of Millennials and Gen Z’ers say “they’ll need six figure salaries to feel like they’ve ‘made it'” and over half also report “living paycheck to paycheck.” Enter the Bank of Mom and Dad.
This trend points to a divide in the Boomer population:
“While older boomers might be thriving — and data shows that some are, at least — it’s a different story for the younger cohort. Younger boomers like herself don’t tend to have pensions, as Jane noted, and instead were relegated to saving in 401ks — for Jane, that meant a tighter limit on how much she could invest in retirement at the beginning.
“At the same time, ‘many people are waiting later in life to have children, so they may be trying to retire and send their kids to college at the same time. And I know friends of mine that are my age, and they’re still paying off their own student loans,’ she said.”
All this adds another challenging component, for many people, to funding the SuperAging life. We’ve written often — for example, here and here and here — about how much money you may need for your nest egg, and what to explore with your financial adviser. Typically, the topics are health and housing. But should your financial “audit” also include how your adult children are doing, and what they may need from you?