The failure-to-launch trend that started with millennials is continuing with Gen Z, and many are turning to parents for assistance, according to a new column by Bloomberg.
According to a 2024 Bank of America study, over half of adult Gen Zers reported that they don’t pay for their own housing. A separate study by Savings.com found that parents of adult Gen Zers expect to give their children $1,813 a month in 2025, which includes expenses for groceries, cell phones, rent and utility bills.
The uncertainty around AI and long-term employment prospects for entry-level jobs raises another question for parents, writes Bloomberg Opinion Columnist Erin Lowry: Can you financially subsidize an adult child for the long-term?
She noted that families spend an estimated average of $26,000 annually on kids through age 18, roughly $468,000 over the lifetime. People in higher cost of living areas pay more. Expenses for many families only continue, with Gen Z and Millennials both experiencing record-high housing and post-grad costs.
Such familial contributions from Boomer and Gen X parents will likely have a big impact on their retirement plans, Lowry argues.
Americans believe they need $1.26 million in order to retire comfortably but just over half think it is somewhat or very likely that they’ll outlive their retirement savings, with 40% of boomers and 56% of Gen X reporting to have the concern.
Boomers aged 61 to 79 have an average 401(k) balance of $249,300 and average IRA balance of $257,002, per Fidelity Q4 2024 data. Gen Xers have an average 401(k) balance of $192,300 and an average IRA balance of $103,592.
“It’s a reminder that millennial and Gen Z parents of young children might need to structure their finances with long-term flexibility in mind,” Lowry wrote.