If you are worried about your children’s financial prospects, get in line.
Just 1 in 8 Americans believe the next generation will be more financially secure than they are, and only 1 in 5 think they will have a better quality of life, according to a new survey commissioned by Haven Life, an online term insurance provider. A small majority also expect the next generation to have less disposable income. (Tweet this)
“There are certain economic realities that a lot of parents are facing in terms of difficulty making ends meet and struggling with their own financial challenges,” said Yaron Ben-Zvi, co–founder and CEO of Haven Life, which is owned by MassMutual. “A lot of it is taking their own experience and projecting it forward and thinking their kids are going to be struggling with some of the same issues.”
The online survey of 1,124 adults was conducted during the first quarter of 2015.
The respondents have reason to be pessimistic. Census Bureau data show that median earnings for workers ages 18 to 34 rose between 1980 and 2000 to a high of $37,355, but for the period 2009-2013, they dropped to $33,883. (Tweet this) The figures were in 2013 dollars.
Rising levels of student debt are also weighing on the next generation. Between 2000-2001 and 2012-2013, the average amount of a student loan for any kind of postsecondary institution increased 39 percent in 2012-2013 dollars, to $7,000, according to the National Center for Education Statistics.
If money is no object, though, the survey respondents are more optimistic. Some 66 percent expect the next generation to be at least as healthy as they are, and to have healthier habits. Half of the respondents expect the next generation to be more environmentally conscious and lead a greener lifestyle.
A slim majority also expects the next generation to be more ethnically and racially diverse—a reasonable assumption if current trends in Census Bureau data hold true. The bureau calculated that 44.2 percent of millennials, whom they define as being born between 1982 and 2000, are part of a minority race or ethnic group. (Younger cohorts are even more diverse: in 2014, 50.2 of Americans under age 5 were part of a racial or ethnic minority.)
With millennials now the largest generation—the Census Bureau counts 83.1 million millennials, compared with 75.4 million boomers—the impact of their financial situation will likely ripple through the economy.
Ben-Zvi sees millennials having financial goals similar to their parents’, like wanting to own a home and start a family. “Their goals, to my mind, don’t really shift” from what their parents wanted, he said. The implication of the survey, he added, “is probably that they may do these things later, and that will probably trickle down to other financial goals in their lives.”