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Health & Fitness

A Dim Outlook for the Under-30 Generation


Subdued Expectations…

Many of us are descendants of immigrants and the expectation has always been that the next generation will succeed to new heights of education and prosperity. The senior generation, Baby Boomers and Gen X’er’s have generally seen this take place.

In speaking with my clients, no one seems to have any faith that their children will do as well, never mind better than they did! In fact, some of our clients are purchasing turnkey businesses to generate income, buying homes or putting aside funds to assist their children down the road. The concern has grown from “how much is enough for my retirement” to “how can I live out my life in comfort AND provide something for my children and/or grandchildren”.

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Overall Outlook….

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Zero Hedge (www.zerohedge.com) recently published some rather frightening statistics. At a time when folks are normally buying their first home, getting married and thinking of starting a family, the under 30 generation is saddled with unprecedented amounts of student loan debt and facing a dismal job market.

We have a “boomerang generation” of adult children who are moving back in with their parents. In fact, 25 million adult children live with their parents. According to the Pew Institute 57% of 18-24 year olds were living with their parents in 2012. This trend is reverberating across generations as it is affecting both the cash flow and retirement plans of the parents.

The fulltime employment as well as the income levels of the under-30 year olds continues to fall. The labor force participation of 18-24 is at an all-time low. Only about a third of all adults in their early 20’s are working a full-time job. Back in 2000, 80% of men in their late 20’s had a job. Today, only about 65% do.

During 2012, young adults under age 30 accounted for 23% of the workforce, but they accounted for 36% of the unemployed. During 2011, 53% of all American’s with a bachelor’s degree under age 25 were either unemployed or under-employed. Almost half of all recent college graduates are working jobs which do not require a college degree.

In 1984, the median net-worth of households led by someone 65 or older was 10 times larger than the median net-worth of households led by someone 35 or younger. Today, that ratio has grown to 47 times! This is part of the reason for the shift in housing to a strong rental market. Lower incomes, more student loan debt and less job security combined with more stringent lending standards means buying a first-time home is a challenge for many young adults.


Student loans…potentially the next crisis….

Approximately, two-thirds of all college students graduate with student loans. According to the Federal Reserve, the total amount of student loan debt has risen 275% since 2003. Approximately 40% of all households are led by someone under the age of 35 who is paying off student loan debt. In 1989, this figure was below 20%.

According to the U.S. Department of Education, 11% of all student loans are at least 90 days delinquent. That totals $146 billion! Total student loans outstanding surpassed $1 trillion, greater than outstanding credit card debt. A coalition of bankers has advised Ben Bernanke that the next bubble to burst is the student loan debt.

These are difficult times for the future of our nation. We would welcome hearing approaches which have worked to assist your children as well as your concerns.


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