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Financial Planning > College Planning

When you're going on 30 and living at home

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(Bloomberg) — Ah, to be young and wild and not at all free. Living with your parents. In your late-20s.

In January, the U.S. Department of Education released a kind of “Where Are They Now” report on Americans it had begun surveying a decade ago when they were high school sophomores. The approximately 13,000 participants in the 2012 follow-up survey were around the age of 26. The statistical renderings of their lives offer a snapshot of the older half of the U.S.’s millennial generation and provide some — albeit narrow — perspective on what it means to have entered adulthood amid the tremors of the Great Recession.

Some notable data on 26(ish)-year-olds in the U.S.: Thirteen percent “reported they were neither working for pay nor taking postsecondary courses.” Of those who had enrolled in college, 60.2 percent reported they had taken out student loans. Forty percent had been unemployed for one or more months since January 2009; 20.6 percent owned/paid mortgage on their current residence. Money was a source of anxiety, which is understandable since 53.8 percent made less than $25,000 from employment in 2011.

On the potentially brighter side: 56.7 percent of those working recognized their current job as a step on the “path toward career goals.” Even better, 10.5 percent of those employed suggested that their “current job fulfills career goals.” You can choose to read the latter figure as either a sign of unbridled optimism or deficient ambition. I choose the former. I have faith in us.

The Atlantic’s Jordan Weissmann — who, like some of those surveyed, graduated college in 2008 — presented some of the survey findings in a series of charts. Fellow millennial Katy Waldman wrote of the study in a Slate piece bearing the headline, “More 27-Year-Olds Live With Parents Than Roommates.” Yikes.

Indeed, the data on “current living arrangements” were particularly interesting: 22.6 percent were living with their parents, compared with 42.3 percent living with a spouse or partner, 18.9 percent living alone, 10 percent living with roommate(s) and 6.2 percent in an “other” living situation. Education makes a difference: Broadly, those with more schooling were less likely to be living at home.

If nothing else, the survey provides a bit more contour for the amorphous — and at times somewhat derogatory — living “in their parents’ basement” stereotype that continues to attach itself to our generation.

According to a Pew Research Center analysis of U.S. Census Bureau data, 36 percent of the country’s 18- to 31-year-olds were living in their parents’ homes in 2012 — the highest proportion in at least 40 years. That number is inflated because college students residing in dorms were counted as living at home (in addition to those actually living at home while going to school). Still, 16 percent of 25- to 31-year-olds were crashing with mom and pop — up from about 14 percent in 2007 and 10 percent in 1968.1 In a Pew survey conducted in December 2011, 34 percent of adults aged 25 to 29 said that due to economic conditions they’d moved back home in recent years after having lived on their own.

Pew’s analysis of the 2012 data cites lower levels of employment, an increase in college enrollment and a decrease in young people getting married as factors in the increase of millennials living at home. Of course, tying the knot might not be the best option when you don’t have a job. Which brings us to the big unknown both for millennials and those trying to sell products and services to us: Has adulthood been delayed or wholly upended?

We’re not getting married as young as those in previous generations did. We’re not buying as many houses or cars. But maybe we will do these things in time — just in more time than our parents.

Or maybe we won’t. Perhaps a chunk of millennials will never catch up, our lives channeled by the deep grooves of an economic calamity forced upon us by the timing of our births and graduations.

It could be a long struggle. “Lisa Kahn, a labor economist at the Yale School of Management, studied the earnings of men who left college and joined the work force during the deep recession of the early 1980s,” the New York Times’s Annie Lowrey wrote last March. “Unsurprisingly, she found that the higher the unemployment rate upon graduation, the less graduates earned right out of school. But those workers never really caught up. ‘The effects were still present 15 or 20 years later,’ she said. ‘They never made that money back.’” Citing additional research, Lowrey noted, “For the first time in modern memory, a whole generation might not prove wealthier than the one that preceded it.”

In April, Sarah Ayres of the liberal Center for American Progress attached numbers to the phenomenon: “We estimate that the nearly 1 million young Americans who experienced long-term unemployment during the worst of the recession will lose more than $20 billion in earnings over the next 10 years.” But as Weissmann and Derek Thompson noted in the Atlantic in August 2012, while the recession is partly to blame for a decrease in home and car purchases, “It’s highly possible that a perfect storm of economic and demographic factors — from high gas prices, to re-­urbanization, to stagnating wages, to new technologies enabling a different kind of consumption — has fundamentally changed the game forMillennials.”

A lack of wealth — combined with cultural change and technological advancements — is bound to affect life-courses and may well narrow, or re-route, the options of many. Data offers hints about wheremillennials may end up, but only time – - and who knows how much of it? — will tell. Until then, it might not be a bad idea to stay in mom and dad’s good graces.


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