The millennial generation is one that groans under a massive debt load as student loans, in addition to all other types of debts, have already hamstrung them with close to $1 trillion in obligations. As a result, many parents of adult children between the age of 18-34 are willing to forgo or accept a lower standard of living in retirement to support their children according to a new study. This is due to parental concerns over the ability of young adults to establish their own households due to the debt load many carry which makes it hard to impossible to buy a house or start a family without assistance. But this willingness to extend their working years may indirectly lead to problems for adult children as jobs which would otherwise be available are retained by older generations that forgo retirement. This factor, when combined with the fact that older workers tend to control the highest paying jobs, could easily lead to a robbing Peter to pay Paul scenario in which the millennial get more support but have fewer opportunities to become self sufficient. In any event, financial planners are now advising clients to make sure they take the time to explain the burden of debt, be it for school or otherwise, with their children in order to avoid the situation in which parental support is necessary. In addition, parents should encourage their children to seek job opportunities in emerging fields that will have less competition from older, established workers and high growth potential when it comes to employment prospects.
See, Half of U.S. Parents Would Retire Later to Support Adult Children Financially: BMO Wealth Institute Report, CNN Money, December 22, 2015.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
