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Young Adults Struggle for Financial Independence: Survey

Young Adults Struggle for Financial Independence: Survey
Young Adults Struggle for Financial Independence: Survey

While most young adults see financial independence as a marker of success, many are finding that independence to be an elusive goal, a recent survey found.

Financial firm Merrill Lynch and research institute Age Wave surveyed more than 2,700 adults. While the focus of the study was on what the researchers described as “early adults”—those between the ages of 18 and 34—researchers also spoke to some adults in other generations.

Most survey respondents (75%) said achieving financial independence from one’s parents was a key piece of “what it takes to be an adult.” That was more than the 61% who named full-time employment as the biggest indicator of adult responsibility, as well as the 30% who said homeownership and the 20% who said starting a family.


Yet, many are finding that marker to be a challenging goal to reach. In fact, 80% of early adults said financial independence is harder to reach today than it was for generations before them. Many of their parents likely agree, as 70% of baby boomers surveyed felt the same way.

Student loans and other debts are among the biggest challenges young adults face today. Many survey respondents admitted to grappling with student loan debt, with 36% of graduates currently paying off loans saying the debt “wasn’t worth it.”

Also, roughly 1 in 4 early adults with a 401(k) retirement plan have taken an early withdrawal from it, with the most popular reason cited being to pay off credit card debt. Taking money out of your tax-advantaged retirement is generally considered a bad move unless absolutely necessary.

“Today’s young adults are encountering more complex financial paths than prior generations, forcing them to postpone life milestones and putting their ability to save for retirement at risk,” Lorna Sabbia, head of retirement and personal wealth solutions at Merrill Lynch parent company Bank of America, said in a press release accompanying the survey results.

Early adults are also looking to their families for help, with 58% saying they would not be able to maintain their current lifestyles without some support from their parents. Other ways early adults are receiving help from family include:

  • 41% of early adult homeowners used parental money for some or all of their down payment

  • 26% have moved back in with their parents for a period of time

  • 46% received at least some help from parents with paying for a cell phone plan

  • 36% took help from parents for car expenses

  • 34% had help from parents making rent or mortgage payments

Interestingly, however, women are less likely to need parental support than men. Among adults in their early 30s, 49% of women received financial support from their parents compared to 62% of men.

Like all money-related goals, achieving financial independence takes time, discipline and commitment. While student loan debt is a necessary burden for some who are committed to getting an education, some other debts such as high-interest credit card debt can sometimes be avoided.

If you’re in the early stages of adulthood and saddled with debt, know that you’re not alone. Don’t beat yourself up about it—instead, look for ways to cut expenses, or possibly consider taking on side gigs to make extra money that can help you pay the debt off faster.