The Short of It
Are millennials the most financially burdened generation in recent history? New data says yes.
According to recent census data, of the 20 million millennials who are parents, a troubling 20 percent live in poverty. Dubbed the poorest generation in 25 years, the glum economic status of many 18- to 34-year-old moms and dads is due to a combination of factors: the economy, a challenging job market, and having to pay off astronomical student loans. According to the stats, millennial parents are dealing with 25 percent higher student loan bills than their peers who don't have children. The rapidly rising cost of childcare doesn't help either.
Another financial stressor is having to help their own parents, even as they raise their young families. A new TD Ameritrade survey found that about 20 percent of millennials provide financial support to their folks. That data flies in the face of a common millennial stereotype that they are the generation that graduates college and moves back home indefinitely.
"Millennials and Gen Xers are financially supporting their parents, and in some cases their adult children as well, to a much a greater degree than [before]," Matthew Sadowsky, director of retirement at TD Ameritrade, told Yahoo Finance.
Millennials' future looks bleak given this news, and more results from the TD Ameritrade survey say more than 1/3 of respondents don't feel as financially secure as their parents and over half do not invest money as successfully. Not only do they face having to increasingly care for aging parents, but with no relief in sight on the student loan and childcare cost front, how can they dig out of the money pit?
Sadowsky says planning ahead with the assumption that you will have to support a family member is key. He suggests setting aside money in a separate account by allocating part of your retirement plan to it. If you don't end up needing the money to support someone, you can still put that money toward retirement.
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