Majority of Millennials Receive Financial Support From Parents
Seventy-four percent of Millennials receive financial support from their parents, according to UBS Wealth Management Americas’ quarterly UBS Investor Watch report, “The Ties That Bind.”
The report, which examines how Baby Boomers and their Millennial children are redefining family and finances, found that Boomer parents are overwhelmingly positive about their ability to help their children financially. A majority (80%) say they feel good about providing financial support, while only 10% say they withhold it to teach adult children financial responsibility. However, 52% of Millennials feel shame, frustration or guilt about accepting assistance from their parents.
The type of financial support can include health insurance (29%), home buying/renting (28%), auto insurance (26%) and utilities (23%), though Millennials receive funding for vacations (19%) and spending money (21%) as well.
The study also finds that Millennials are almost twice as likely to move home after college as their parents were, mainly to save money (39%). Some also say they move back for convenience (27%) or to achieve job stability first (26%). But some live with their parents because they want to: 24% of Millennials prefer to live with their parents, while 22% say their parents wanted them to stay. Twenty-one percent say they live with their parents to pay down debt.
NEXT: Generational differences in financial planning
When it comes to finances, a majority of Millennials (73%) tend to focus on short-term needs and goals, such as homes and travel, believing retirement is too far away to worry about. Over half of Millennials with retirement accounts have or would consider dipping into them to make a large purchase, and 25% have already withdrawn funds. Only 13% of Boomers, on the other hand, have withdrawn retirement money.Millennials have not followed their parents’ investment behaviors; most would rather time the market, while Boomers typically believe in “buy and hold.” Millennials are also more inclined to trust their gut when it comes to investing (32% vs. 14% of Boomers), but both generations would rather follow a plan. On average, Millennials hold twice as much cash as Boomers (47% of assets vs. 20% for Boomers). However, they do not appear to feel safer or more content with their finances: Only 29% are happy with their portfolios, compared with 78% of Boomers.
Millennials say they want advice on a range of topics including financial planning (71%), investing (70%), budgeting (63%), insurance (61%), mortgage (60%), children’s college savings (59%) and debt management (55%). Most Millennials say they are interested in working with an adviser, but only one-third currently do so while the rest rely on friends and family. Three-quarters of Millennials would consider using their parents’ adviser.
The full report is available here.