Americans once defined success mainly by whether they owned a house or were better off than their parents. Today, it’s a debt-free college education and a comfortable retirement.
U.S. adults feel that their top indicator of financial success is having enough money in the bank to retire (28 percent of adults), followed by sending their kids to college without having to borrow to pay for it (23 percent), according to a telephone survey sponsored by the American Institute of CPAs. Homeownership and upward mobility each came in at a distant 11 percent of the adults, age 18 and up, randomly surveyed by Harris Poll.
“No longer are homeownership and upward financial mobility the hallmarks of financial achievement,” said Ernie Almonte, chairman of the CPA Institute’s Financial Literacy Commission. “Americans have changed the benchmarks for their financial success.”
More than half of those surveyed also felt that Millennials will enjoy less upward mobility than previous generations.
The implication of having two of life’s largest expenditures – college and retirement – pushed on to the individual is sinking in. Social Security and traditional employer pensions are the primary sources of income for most retirees today. But the shift to our DIY retirement system for future retirees has left more than half of American workers at risk of having a lower standard of living when they retire, up from about one-third in 1983.
At the same time, cuts in public funding for U.S. colleges and soaring tuitions have increasingly required the middle class to either save or borrow for college. This is a stark contrast to the 1960s and 1970s, when baby boomers’ parents often could pay their offspring’s lower tuitions out of their current income. With more Americans than ever attending college, the new goal is being able to afford it.
Almonte, who is a CPA, said his Millennial-aged clients not only have student debt but also may have been affected by watching their parents’ home values plummet during the Great Recession – and he’s seen this reflected in a hesitance about taking on a mortgage. Millennials “saw that squeeze and became more risk averse,” he said.
Their parents also face a generational dilemma. Footing the bill for their children’s college education may jeopardize their own retirement. But having their adult children pay could delay major life decisions and expenditures, such as starting their own family or buying a house.
Almonte’s recommendation – you’ve heard it before on this blog – is to “save early on and make informed decisions” to meet the growing challenges of achieving the new American Dream.
Use Hackathons to Go from Zero to Business Impact in a Week
Homer Simpson vs Mr. Burns
7 Ways to Effectively Lead a Team on Different Schedules
6 Things NOT to Do with Gatekeepers
How to Close Skill Gaps During Tech Disruption
How Do YOU Find Happiness at Work?
6 Ways to Marie Kondo Your Sales Process
Estate Planning in Second Marriages
Why Companies Should Focus on Employee Health
Retirement Medical Costs Not So Scary When Seen Yearly
Advisor12 hours ago
Homer Simpson vs Mr. Burns
Insights22 hours ago
Europe: The Good, the Bad and the Ugly
Markets22 hours ago
The Mad March Bounce
Development22 hours ago
Persevering Through Daily Mundane Is the Quickest Path to Success
Markets1 day ago
What’s Causing Investors to Come off of the Sidelines?
Sales Strategy2 days ago
7 Key Components When Selling to the C-Suite
Equities2 days ago
Should We break-up Facebook, Google, Amazon, Apple?
Global2 days ago
Don’t Be Fooled by the Politics of Envy