Friday, April 30, 2010

Millennials Face an Uncertain Future

While you're worrying about Flint's future, take some time to fret over the fate of Generation Y, the more than 50 million teens and twentysomethings profiled by Christine Dugas in USA Today. I typically hate these sweeping stories that claim to sum up an entire generation, but some of the stats are pretty depressing.

Dugas reports:
No standard definition for Generation Y exists, but analysts generally classify anyone born from the 1980s to 2000 as members. Demographers also call them the Millennial Generation.

Their plight seems as much created by members' pre-recession personal finance habits as by the misfortune of coming of age as the recession took hold in December 2007:

•About 37% of 18- to 29-year-olds have been underemployed or out of work during the recession, the highest share among the age group in more than three decades, according to a Pew Research Center study released in February.

•This generation is the least likely of any to be covered by health insurance. Just 61% say they were covered by some form of a health plan, the Pew study said.

•Only 58% pay monthly bills on time, a National Foundation for Credit Counseling (NFCC) 2010 survey said.

•60% of workers 20 to 29 years old cashed out their 401(k) retirement plans — typically a big financial no-no because such a move squanders retirement assets and forces the recipient to pay a tax penalty — when they changed or lost jobs, an October study by Hewitt Associates said.

•Nearly 70% of Gen Y members are not building up a cash cushion, and 43% are amassing too much credit card debt, says a November MetLife poll.

On average, Gen Yers each have more than three credit cards, and 20% carry a balance of more than $10,000, according to Fidelity Investments.

Millennials are graduating from college with an average of $23,200 in student debt, according to the most recent data from the Project on Student Debt. That is a 24% increase from 2004.

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