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Millennials, money,
Mom and Dad
A study of young adults’ awareness of the
financial impact of living with their parents
A recent Pew Center analysis of census data reveals that more
young adults live with their parents than ever before.1 Do they
understand the effect they’re having on their parents’ financial
security? Should they?
Americans are notoriously tight-lipped about their personal
finances. Some do not divulge their incomes, net worth or debt to
anyone – not even their financial advisors2 or their grown, financially
independent children.
What about adult children who currently live at home? Is providing free
or subsidized room and board simply what loving parents do when their
grown-up kids face tough financial times? Or is it another version of
helicopter parents flying in to solve problems for their offspring?
Securian Financial Group surveyed young adults who live with their
parents to seek insight into the families’ financial arrangements.
When asked to select all that apply, nearly one-fifth (19 percent) have
no idea what kind of impact, if any, their living at home has on their
parents’ finances. More than 90 percent have no deadline for moving
out and only 10 percent pay rent. A large majority (82 percent) say
they compensate their parents by “helping with household chores.”
F78685-3 9-2013
September 2013
The high cost of a good start
The Pew study made headlines when it revealed that nearly 22
million young adults age 18 to 31 currently live with their parents. It’s
easy to understand why so many families choose this arrangement,
given the economic headwinds millennials face.
Times are tough for America’s millennials. At nearly $1 trillion,
student loan debt is at a record high and the average 25-yearold’s student loan debt burden was around $22,000 in 2012.3
Unemployment among millennials is hovering around 13 percent,4
almost double the national rate of 7.3 percent.5 Forty-one percent of
workers who graduated from college in the past two years say they
are underemployed and working in jobs that do not require college
degrees.6
Forty-one percent of workers
who graduated from college
in the past two years say
they are underemployed and
working in jobs that do not
require college degrees.6
Generation Me?
Conversely, millennials are accused of being self-absorbed and
having strong feelings of entitlement. Like it or not, young adults
score higher on the Narcissistic Personality Inventory now than at
any time since 1979.7 Some may consider this a logical outcome of
the way some millennials were raised – rewarded for participating
rather than achieving, accustomed to a self-customizing web-centric
world, and having parents who solve problems rather than guide
children to find their own solutions.
In light of conflicting data, it’s unclear whether more young adults
live at home because the lasting effects of the Great Recession make
it particularly difficult for them to live independently or because they
expect their parents to continue to support them.
Young adults score higher on
the Narcissistic Personality
Inventory now than at any
time since 1979.7
Methodology
Securian developed and commissioned an online survey of
millennials and adult children who live with their parents. Millennials
age 18 to 32 with a high school education or higher were targeted,
with a total of 700 completing the survey August 26 – September 3,
2013. Specific areas of interest include:
• reasons for living at home
• whether they compensate their parents for living at home
• perceptions of how living at home has affected their parents’
financial situations and retirement plans
• whether they would reciprocate if their parents were unable to live
on their own
Millennials, money, Mom and Dad – September 20132
Who are they?
Figure 1. Age (n= 700)
Of the 700 young adults surveyed, three-fourths are 18 to 25
years old and 72 percent are women. One-fourth are 26 to 32 and
one-fourth currently attend college. For 22 percent, their highest
level of education to date is a high school degree.
26-31
25%
One-fourth of the young adults we surveyed who live with their
parents possess bachelor’s or advanced degrees. (Figures 1, 2, 3)
75%
18-25
Figure 2. (n = 696)
Highest level of education completed
Response
Percent
Count
Percent
Count
21 or under
38.4%
269
High school graduate or GED
22.3%
155
22 – 25
36.9%
258
Some college
22.8%
159
26 – 29
20.7%
145
Still attending college
25.4%
177
30 – 32
College graduate with a 2 year degree
4.7%
33
College graduate with a 4 year degree
22.4%
156
2.3%
16
100.0%
696
Advanced Degree
Total Responses
Not Answered
4
Total Responses
4.0%
28
100.0%
700
Figure 3. Gender (n= 700)
Male
Why they live at home and how long they plan
to stay there
28%
As noted, college costs, unemployment and underemployment make
it difficult for many young adults to afford to live on their own. But,
when asked to select all that apply, nearly half (48 percent) said
they live with their parents so they can save money to buy their own
homes. Nearly 40 percent said they live at home so they can spend
their money on other things, such as cars and travel. (Figure 4)
72%
Female
Response
Male
Female
Figure 4. (n = 696)
Why do you live with your parents? (select all that apply)
Percent
Count
Saving money to buy my own home
48.1%
336
Saving for other things I want to be able to afford (travel, car, etc.)
38.7%
270
Unemployed
35.8%
250
Going back to school
32.5%
227
Reducing college costs
28.5%
199
Paying off my student loans
27.2%
190
Underemployed (working, but not earning enough to live on my own)
21.3%
149
Paying off other debt (credit cards, other loans)
13.5%
94
Caregiver for one or both parents
6.0%
42
Saving for upcoming wedding
4.0%
28
Other
Total Responses
5.0%
35
100.0%
696
Total Responses
Percent
Count
28.3%
198
71.7%
502
100.0%
700
Note: 2 respondents did not select any options for this question
Millennials, money, Mom and Dad – September 20133
More than three-fourths (77 percent) said their parents encouraged
them to live at home (Figure 5). A large majority (91 percent) said
their parents placed no conditions on how long they may stay.
Among the nine percent who did, college graduation and landing
a job that pays well enough for them to live independently are the
benchmarks for moving out. (Figure 6)
Figure 6.
Did your parents establish a time limit
for how long you may continue to
live at home? (n=700)
Yes
9%
63 count
No
91%
637 count
Please select the option that best describes the length of time
established for you to live at home (n=63)
1 – 3 months
Percent
Count
3.2%
2
4 – 6 months
12.7%
8
One year
15.9%
10
Can only live at home until I finish college
31.7%
20
Can only live at home until I get a job that pays well enough for
me to afford to live on my own
34.9%
22
1.6%
1
100.0%
63
Other
Total Responses
Figure 5. (n= 698)
How they compensate their parents
The survey offered several response options for compensating
parents and asked respondents to check all that apply. More than 80
percent say they perform household chores and more than half (54
percent) provide assistance with activities of daily living.8 Ten percent
pay rent. Eight percent provide no compensation. (Figure 7)
Did your parents encourage you to
live at home?
No
23%
Figure 7. (n = 699)
In what way(s) do you compensate your parents for living
at home? (select all that apply)
77%
Yes
Percent
Count
Help with household chores
82.4%
576
Response
Provide assistance with activities of daily living
54.2%
379
Yes
Contribute to household expenses (utilities, groceries, etc.)
48.5%
339
No
10.3%
72
Total Responses
None. My parents don’t ask/require me to compensate them.
8.2%
57
Not Answered
Other
2.3%
16
100.0%
699
Pay rent
Total Responses
Percent
Count
76.5%
534
23.5%
164
100.0%
699
2
Note: 1 respondent did not select any options for this question
Millennials, money, Mom and Dad – September 20134
What they know about their parents’ finances
When these two generations live under the same roof as adult
members of one family, do they feel equally responsible for
household finances? Do parents share with their grown-up children
the effect that subsidizing them has on their own financial stability?
Figure 8. (n= 699)
How familiar are you with your parents’
finances including income, retirement
savings and/or expenses?
Many do not. Half of our respondents say they are familiar or very
familiar with their parents’ finances and half say they are not (Figure
8). Thirty-seven percent are unsure about the impact their living at
home has on their parents’ finances. (Figure 9)
Figure 9. (n = 700)
Thinking of your parent’s financial situation, in what way(s)
has living at home affected their finances?
(select all that apply)
Very familiar/
familiar
50%
50%
Slightly
familiar/not
at all familiar
Percent
Count
Money I pay them helps with household expenses
30.4%
213
Response
Their household expenses are higher
27.6%
193
Money I pay them helps with mortgage payments
7.1%
50
One or both parents has delayed retirement to help me continue
with school
5.1%
36
Not at all Familiar
14.4%
101
Total Responses
100.0%
699
Money I pay them goes to their retirement savings account
4.0%
28
They have used some of their retirement savings to help me
with expenses
3.9%
27
One or both parents has delayed retirement to help support me
2.9%
20
Other
3.9%
27
36.7%
257
100.0%
700
Unsure
Total Responses
Percent
Count
Very Familiar
18.0%
126
Familiar
31.6%
221
Slightly Familiar
35.9%
251
Not Answered
Digging deeper into those responses reveals glaring inconsistencies.
Among those who said living at home has no impact on their
parents’ personal finances (Figure 10):
• Twenty-five percent indicated elsewhere in the survey that their
parents’ household expenses are higher.
1
Figure 10. (n= 313)
Responses of those indicating their living at
home has no impact on parents’ finances.
In what ways has living at home affected
your parents’ finances? (Select all that apply)
Expenses
are higher
Other
25%
32%
• Forty-four percent indicated elsewhere in the survey they are
unsure of the impact they have on their parents’ personal finances.
Millennials’ confusion about their parents’ finances also is
underscored in this data: Of the 130 who say they are unsure of
the financial impact of living at home, 32 percent also claim to be
familiar or very familiar with their parents’ finances.
44%
Response
Unsure
of impact
Percent
Count
Their household
expenses are higher
25.0%
79
Unsure of impact on my
parents’ finances
44.0%
137
Total Responses
313
Millennials, money, Mom and Dad – September 20135
Effect on parents’ retirement plans and finances
When all respondents were asked whether living at home will have a
negative impact on their parents’ retirement plans, 73 percent said
no but one-fifth (20 percent) said they don’t know (Figure 11). When
asked flat out about the impact their living at home has on their
parents’ finances generally, 45 percent said it has no impact. Nearly
one-fifth don’t know what, if any, impact it has (Figure 12).
Figure 11. (n= 697)
Do you think that your living at home will
have a negative impact on your parents’
retirement plans?
Yes
Unsure
19%
8%
Figure 12. (n = 699)
Overall, would you say that your living at home has had …
Percent
Count
A positive impact on your parents’ financial situation
20.6%
144
A negative impact on your parents’ financial situation
16.0%
112
No impact on your parents’ financial situation
44.8%
313
Unsure of the impact on my parents’ financial situation
18.6%
130
Response
100.0%
699
Yes
7.6%
53
No
72.9%
508
Unsure
19.5%
136
100.0%
697
Total Responses
A small number (four percent) indicated elsewhere in the survey their
parents delayed retirement to help cover the cost of their children
living at home. It is possible this percentage is higher. Because so
many are unaware of how living at home is affecting their parents
financially, it’s possible respondents did not select this option
because they don’t know it’s happening.
A survey conducted earlier this year of parents of adult children
living at home shows that more than half (54 percent) of the baby
boomers interviewed had housed their adult children three months
or longer and 42 percent said it’s had a negative impact on their
finances. More than three-fourths (76 percent) of parents feel
obligated to financially support adult children fallen on hard times
and 57 percent will support them even if it has a negative effect
on their own retirement.9
If the tables turned
The same young adults who don’t know or are unsure of the effect
their living at home has on their parents’ finances may not find out
until – for one reason or another – the tables turn.
The majority of respondents are fine with the idea of their parents
moving in with them some time in the future. Seventy percent said
they would be willing to have one or both parents move in should
they become physically, financially or emotionally unable to live on
their own. Another fifth (21 percent) also said yes, though they would
explore other options first (Figure 13).
73%
No
Total Responses
Percent
Count
Not Answered
3
Figure 13. (n= 699)
In the future, would you be willing to
have one or both of your parents move
into your home if they were financially,
physically, or emotionally unable to
continue living on their own?
Response
Percent
Count
Yes
69.7%
487
Yes, but would explore
alternative options first
(assisted living, etc.)
21.3%
149
6.4%
45
Yes, if it did not negatively
affect my finances /
retirement income
No.
Total Responses
2.6%
18
100.0%
697
Millennials, money, Mom and Dad – September 20136
Conclusion: Parents should put the financial oxygen
masks on themselves first
As with oxygen masks on an airplane, parents are better able to help
their children if they ensure their own financial security first. Age 70
may be the new 62 for boomer parents but they are running out of
time to build or grow their retirement savings. Young adults have time
on their side and, while economic conditions may prevent them from
affording a certain standard of living as soon as they or their parents
would prefer, they do have decades to build financial security.
Running out of money as a frail senior would be the worst outcome
for families where parents who delayed retirement savings to put
their children on sound financial footing. There is no guarantee adult
children will be willing or able to support their parents financially
later in life. Financial experts agree that pre-retirees and retirees
should focus now on ensuring they will have adequate retirement
income for at least 30 years.
Securian’s research shows that significant percentages of young
adults living at home do not understand the impact they have on
their parents’ finances. Both generations stand a better chance
of building financial security if they plan now to ensure their own
financial futures.
Age 70 may be the new 62 for
boomer parents but they are
running out of time to build or
grow their retirement savings.
Running out of money as
a frail senior would be the
worst outcome for parents
who delayed retirement
savings to put their children
on sound financial footing.
Millennials, money, Mom and Dad – September 20137
1
“ A Rising Share of Young Adults Live in Their Parents’ Homes,” Richard Fry, Senior Research
Associate, Pew Research Center, August 1, 2013
2
“ Client secrets: What people don’t tell their financial advisors,” Securian Financial Group,
September 2013, http://www.securiannews.com/research/client-secrets
3
“Student Debt Overview,” Federal Reserve Bank of New York, August 14, 2013
4
“Employment Situation Summary,” Bureau of Labor Statistics, September 6, 2013
5
“ August payroll employment increases (+169,000); unemployment rate little changed (7.3%),”
Bureau of Labor Statistics, September 6, 2013
6
“Accenture 2013 College Graduate Employment Survey,” http://bit.ly/17ZfRRR
7
http://www.ncbi.nlm.nih.gov/pubmed/18426259
8
“ Activities of daily living” has a specific meaning for those who care for the disabled. Because this
option was chosen so frequently, respondents in this survey likely had a broader interpretation,
i.e., helping around the house on a daily basis.
9
“Investor Index 2011,” TD Ameritrade Holding Corporation, http://bit.ly/14nAgR7
About Securian Financial Group, Inc.
Since 1880, Securian Financial Group and its affiliates have provided financial security for individuals and businesses in the form of insurance,
investments and retirement plans. Now one of the nation’s largest financial services providers, it is the holding company parent of a group of
companies that include Minnesota Life Insurance Company.
Securian
Financial Group, Inc.
www.securian.com
400 Robert Street North, St. Paul, MN 55101-2098
©2013 Securian Financial Group, Inc. All rights reserved.
F78685-3 9-2013 DOFU 9-2013
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Insurance | Investments | Retirement