The Changing Economics of Emerging Adulthood

Planning

It impacts everyone – from The Greatest Generation to Generation Alpha

It’s a conversation I have with the vast majority of my clients: young adults are delaying the traditional life-milestones of getting a job, marrying and having kids at a much later age than previous generations.

I hear similar stories that you probably hear: my 32 year-old son lives in our basement; my 29 year-old daughter isn’t married yet; when am I going to have grand-kids, etc.

So I decided to do some research and see if I could find real data to support this theory. Turns out, the US Census Bureau just released a Report called: The Changing Economics and Demographics of Young Adulthood; 1975-2016.1

The Census Report “focuses on the education, economic situation and living arrangements of today's young adults and how their experiences differ in timing and degree from what young adults experienced in the 1970s.”

Here is the most striking data point to me:

  • A third of young people – or 24 million of those aged 18 to 34 – lived under their parents’ roof. more than one-third of young adults live at home

Further, the Census found:

  • More young adults lived with parents than with a spouse in 2016.
  • Almost 9 in 10 of the young people who lived with their parents a year ago are still living there.

In fact, because the trends are so startling, there is a new name to describe that stage between childhood and adulthood – it’s called “emerging adulthood.”

Here is what the Census Bureau also discovered about these “emerging adults:”

  • 1 in 4 young people aged 25 to 34 living in their parents’ home (about 2.2 million) neither go to school nor work.
  • In the 1970s, 8 in 10 married by the time they turned 30. Today, not until the age of 45 have 8 in 10 people married.
  • In 2005, the majority of young adults lived independently, which was the predominant living arrangement in 35 states. By 2015, the number of states where the majority of young people lived independently fell to just six.
  • More young men are falling to the bottom of the income ladder. In 1975, only 25 percent of young men had incomes below $30,000 a year. By 2016, that share rose to 41 percent (incomes in both years are in 2015 dollars).
  • Between 1975 and 2016, the share of young women who were homemakers fell from 43 percent to 14 percent.

The Impact on Other Generations?

The reality is that these trends will most certainly impact every generation in ways we can’t anticipate. From taxing our health care system, to replacing (or not) retiring workers, to straining the retirement resources and plans of their parents.

Next time you and I meet, let’s make a point of analyzing where you are so that you’re fully prepared to withstand these trends.

1You can read the entire Report here: https://www.census.gov/library/stories/2017/08/young-adults.html , but I have copied the salient points and the chart for your convenience.

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