New Study Finds that Young Adults Can’t Bank on an Inheritance
By: Sean Naron, Administrative and Advocacy Associate, Consumer Federation of America
Born in the fall of 1989, I am considered a member of the “Millennial Generation.” Millennials are often described as possessing an assortment of distinct character traits, the majority of which are not exactly positive. We have been labeled as narcissistic, a generation of multitaskers obsessed with online profiles (or online anything really), and have been dubbed the “instant gratification generation.”
While the jury is still out to how true all these labels are, a new study has shown that one commonly held idea about millennials is very accurate: too many of us hope to rely on our parents for financial support.
A survey conducted by TD Ameritrade (via USA Today) found that 40 percent of teenagers and young adults between the ages of 13-22 believe their parents will leave them a sizeable inheritance.
Only 16% of parents said that they expect to provide an inheritance for their children.
So, fellow millennials, listen up: as much as we would like it to be true, we can’t bank on receiving an inheritancefrom Mom and Dad. We need to save for our own retirement.
Start Saving (Now):
Thankfully, many of us are on the right path. 56 percent of the teenagers and young adults surveyed by TD Ameritrade indicated that they have opened a savings account. If you do not have one yet, many banks offer special programs for young customers. “Junior banker” programs provide the full experience for your child, including walking up to the bank’s counter and depositing funds themselves, which can be a boost in both confidence and their understanding of finance.
Often times, the financial institution will offer fun incentives to encourage savings, such as rewarding the customer with gift certificates and small prizes for deposits made to the account. Learn more about financial products available to help you save here.
Learn the Lingo:
IRA? 401(k)? Nest-egg? It can be rather daunting as a teen or young adult to sift through the jargon and determine what type of savings program might be best for you. AmericaSaves.org has a variety of resources designed to help you better understand what it all means and how various retirement programs work. America Saves also provides resources for young savers, including Generation Money, a portal where young adults can test their knowledge and learn about savings, and Forty Money Tips Every College Freshman Should Know.
Take the time and effort to start saving now, learn as much as you can about saving for retirement, and reach out to parents, co-workers, and your bank for advice. Sound like a lot to do at once? We’ve been told we’re the best multitaskers, so let’s prove it.