Young People Are Not the Slackers You Think They Are

man reaching for wallet

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Millennials: You’re lazy, entitled, and too busy playing on your phones to make a plan for leaving the nest. At least, that’s the stereotype. The problem is, it’s all wrong.

It turns out that young people aren’t the coddled moochers sponging off their parents that many older generations assume them to be. (Of course, you already knew that.) Some may indeed be suffering from a “failure to launch” syndrome and others might be living with their parents until they get on their feet financially. But a significant minority of people in the 18-to-34 age bracket are actually bankrolling their parents, not the other way around.

Nineteen percent of millennials provided financial support to their parents in the last year, a survey of 1,000 American adults conducted by TD Ameritrade found. They’re not just buying groceries once in a while or occasionally paying the cell phone bill, either. Generous millennial kids shelled out an average of $18,250 per year to help out mom and dad cover day-to-day living expenses and other bills, roughly double the amount that baby boomers and Gen Xers spent on supporting family members.

Keeping their parents afloat is making it more difficult for younger people to start their own families and achieve financial independence. Nearly half of millennials who supported their parents said they’d put off buying a house as a result, 39% said they’d delayed saving for retirement, and 38% had decided to wait to have kids of their own.

Even if you’re not writing a monthly check to mom and dad now, you may need to get ready for the possibility that your baby boomer parents will need help. Forty percent of boomers have no retirement savings, according to a 2015 survey by the Insured Retirement Institute. Only 27% are confident that they will have enough money to last throughout their post-working years, which could stretch on for decades.

give and take

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“The financial downside of living longer may mean not only planning for our own extended retirement years, but also caring for aging family members in ways that can take a solid bite out of any well-laid plans,” Matthew Sadowsky, director of retirement at TD Ameritrade, Inc., said.

Continuing to live at home rather than moving out on their own might be one way some are balancing their own financial needs with those of their parents. Forty-three percent of adult men and 36% of women younger than 34 were living with their parents in 2015, according to Pew Research. That’s the highest those numbers have been since the 1940s. Rather than suffering from a prolonged adolescence, these stay-at-home millennials might be saving money on rent so they can afford to help their parents, or even chipping in to help pay mom and dad’s mortgage.

If you do support your parents financially, it’s important to set some ground rules about what you’ll pay for and how much you can reasonably afford to give. If you know that you’re going to make a $200 payment every month on mom’s outstanding medical bills, you can work that into your budget. (If you provide a lot of support, you may even be able to claim them as a dependent on your tax return.) But opening your wallet every time a need arises is going to create havoc with your finances. It can also breed resentment and lead to conflict later on.

Father and Son, parenting, dad, family

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Even if your parents haven’t yet asked for help, you may still want to sit down and have a conversation with them about their finances. They may have different ideas about how much support you are able or willing to provide and talking through the issue now can help prevent conflict in the future. Also, if it does seem like you might have to support your parents as they get older, you can start preparing now. Broaching the sensitive subject of money isn’t always easy, though.

“With older generations it can be an especially difficult conversation to have,” Sadowsky said. “But, it’s better to have the discussion and do some detective work now — as well as some planning — than get hit with a daunting financial reality later.”

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