Over the past 20 years, America’s young adults have experienced significant unemployment, massive student debt, extreme weather events, a global pandemic, a contentious political environment, and dramatic socio-economic turmoil. Not that these things didn’t happen in previous generations, but today’s young adult is far more involved and aware due to the 24-hour news cycle and their constant companion — the smartphone.
Even with the advantages of today’s technology, there is a sense that the issues facing subsequent generations tend to be getting worse. It is no longer a given that children will be better off in income, education, and opportunities than their parents.¹
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If there is a silver lining to the COVID-19 crisis we believe, it’s that the country must address significant structural changes to improve the lives of all Americans in every facet of the country. Regardless of where we stand on the political spectrum, issues like extreme weather, our ability to respond to pandemic-level health crises, our education system, infrastructure in rural and metropolitan areas, and responsibly harnessing technology and energy to sustain our way of living affects us all. We are all stakeholders and drivers in creating a strong society for the future.
Ultimately, we feel our young people are best positioned to lead the transformation into a stronger America. But let’s consider for a moment some of the challenges they may face as adults.
Longer Life Expectancy
One thing hasn’t changed — each new generation is expected to live longer than the last. The current data suggests that half of the children born in the United States in the year 2000 could live to be 105 years old. On the surface, living longer may sound like a positive, but bear in mind that living longer doesn’t necessarily mean enjoying health or independence in old age. Research shows that people who live longer and have a fulfilling retirement tend to have strong personal relationships and social support systems, eat a healthy diet, maintain better physical health, and remain intellectually active.² In other words, it may not be just about better, life-prolonging drugs.

Working From Home
Moving forward, we believe the reality is that more generations will be working from home. However, if you think back to some of the apartments you may have had in your early adult years, that might not be much of a perk, especially if you have to share an apartment with roommates also working from home. We feel one challenge that remains to be seen is how workers will be compensated for setting up their own home office. After all, if the work-from-home (WFH) staffing model reduces overhead expenses, surely employers will provide a stipend for home office expenses — ranging from computers and office furniture to broadband and utility bills. Or will they?
Who Pays for College?
Now that college has become so expensive, some young adults are opting not to go.³ This could lead to a less qualified workforce and a smaller talent pool. In response to the recent labor shortage, some companies are offering to pay for college. Target, Walmart, Chipotle and Starbucks have all introduced programs to help employees pay for college.⁴

Expensive Lifestyle
One of the perks of today’s generation of young adults is that many were raised under some pretty affluent circumstances. Baby Boomers broke ground in a lot of areas, from women breaking the glass ceiling to improving higher education rates to massive participation in a growing investment market. Unfortunately, lifestyles have become so upscale that it may now be too expensive to have it all. The average middle-class family can’t afford for both spouses not to work⁵, and some young couples are even opting not to have children at all⁶. Between 1950 and 2021, the birth rate in the U.S. declined by 50%. And while 38.3% of women had completed four years of college or more by 2020 (up from 5.2% in 1950), much of the hesitance in starting a family remains financial. Today, economists estimate that it costs an average of almost $250,000 to raise a child to the age of 18.⁷

Meanwhile, declining fertility rates threaten a “demographic cliff” for the future economy. Legislators and the education industry may have to contend with a lower tax base, school closings and declining college enrollment.⁸

Content prepared by Kara Stefan Communications.

1 Klaus Schwab. World Economic Forum. Aug. 2021. “Davos Lab: Youth Recovery Plan.” http://www3.weforum.org/docs/WEF_Davos_Lab_Youth_Recovery_Plan_2021.pdf. Accessed Aug. 15, 2021.
2 Sofiat Akinola. World Economic Forum. Aug. 12, 2021. “Here’s what young people think is key to a long and fulfilled life.” https://www.weforum.org/agenda/2021/08/heres-what-young-people-think-is-key-to-a-long-and-fulfilled-life/. Accessed Aug. 15, 2021.
3 Jessica Dickler. CNBC. Mar. 14, 2021. “Fewer kids are going to college because they say it costs too much.” https://www.cnbc.com/2021/03/14/fewer-kids-going-to-college-because-of-cost.html. Accessed Aug. 15, 2021.
4 Melissa Repko. CNBC. Aug. 5, 2021. “Target to pay 100% of college tuition and textbooks in bid to attract workers.” https://www.cnbc.com/2021/08/04/target-rolls-out-debt-free-college-degrees-to-woo-retail-workers.html. Accessed Aug. 15, 2021.
5 Jacqueline DeMarco. Magnify Money. Jun. 9, 2021. “53% of Households Are Dual Income — And That Percentage Has Risen.” https://www.magnifymoney.com/blog/news/dual-income-households-study/. Accessed Aug. 15, 2021.
6 Anna Brown. Pew Research Center. Nov. 19, 2021. “Growing share of childless adults in U.S. don’t expect to ever have children.” https://www.pewresearch.org/fact-tank/2021/11/19/growing-share-of-childless-adults-in-u-s-dont-expect-to-ever-have-children/. Accessed Aug. 15, 2021.
7 Ann M. Oberhauser. World Economic Forum. July 9, 20201. “Women in the U.S. are having fewer babies. What’s driving this trend?” https://www.weforum.org/agenda/2021/07/declining-fertility-rates-research/. Accessed Aug. 15, 2021.
8 Ibid.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

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