Many so-called Millennials are struggling financially, and they may be the first U.S. generation to be worse off than their parents. The 80 million-strong demographic is vital for the U.S. economy based on its size alone; but many have trouble accurately answering basic personal finance questions, spend beyond their means, and are worried about their debt, according to a new survey by the Investor Education Foundation of the Financial Industry Regulatory Authority.
Ameriprise Financial also found that an overwhelming majority of Millennials feel burdened by car payments, credit cards, and debt. Only 57 percent of those with access to a workplace retirement plan are contributing enough money to take full advantage of the employer match. A report by the Pew Research Center compared previous generations to Millennials, concluding that “coming of age during the country’s deepest economic downturn since the Great Depression” made it difficult for them to establish themselves financially.
Paul Taylor, a Pew executive vice president, says baby boomers and Millennials will have lead roles in a coming economic battle. “Every family, on some level, is a barter between the generations — I care for you when you’re young so you’ll care for me when I’m old,” he writes in his book, “The Next America: Boomers, Millennials, and the Looming Generational Showdown.” Many Millennials, however, will not be able to afford to take care of aging parents.
The Pew research found that about half of Millennials with student loans say the debt has made it more difficult to make ends meet. Thirteen percent of 18- to 24-year-olds were out of work in January, and the proportion of young adults living in their parents’ home reached a historical high in 2012. Many say they would like to marry but lack “a solid economic foundation.” Millennials have less wealth and income compared to the two generations immediately before them at the same stage of their lives. Without any changes to Social Security, “virtually all Millennials will get back less in benefits than they contribute in taxes,” Taylor writes.