“Too much of everyone's income goes to pay for higher taxes and health care,” said Fradella, 57, a certified family mediator in Florida. “Everything we taught our kids about how to budget and save is now ridiculous.
“We have one child, and he may never be able to afford the taxes on our home which we plan to gift to him,” she added.
More and more American adults agree. New research published by life insurance provider Haven Life shows just one in eight Americans believe the next generation will be more financially secure than themselves. Also, only 20% think the next generation will have a better quality of life — with many parents looking at their own financial difficulty as the reason for their pessimism.
"For the Baby Boomer generation, pocket money from mom and dad was only part of their early childhood,” said Yaron Ben-Zvi, CEO of Haven Life. “Today's parents are increasingly prepared to worry about and provide for their children's financial well-being far into their adulthoods.”
Paul Murray, president of PTM Wealth Management, said the next generation will have a tough time duplicating their parents' standard of living — even while their parents are not nearly as well off as their own parents.
“Pensions have gone the way of the dodo,” said Murray, as one of the reason standards may be falling. “Retirees used to be able to count on a pension plus Social Security to fund their retirement, in addition to their savings.”
Murray said the reality is most companies no longer offer pensions, and those that do are converting them so that their workers will have to invest a lump sum for their own benefit. In addition, he added the stagnation of wages and increased costs of health care and education likely could lead to decreased standards.
“Average wages have essentially been flat for a decade, and the trend may very well be down,” said Murray, adding while Social Security offers a cost of living increase most years which is tied to inflation, generally those increases fall short of matching food and energy costs.
“In addition, the next generation will have to fund their own retirement and may look to a smaller Social Security benefit, as well,” he said.
Chris Miles, founder of financial education site Money Ripples, agrees, adding that flat wages and increasing costs already may have caused a standard of living decline.
“We have already seen proof of the decline as both parents have needed to work outside of the home,” Miles said. “Inflation rates are rising faster than wages, despite the claim of government reports. As cost of living increases faster than wages, the more difficult it will become for the rising generation.”
However, some others point out while the next generation may not have the monetary benefits their parents enjoy, they may see their quality of life as just as good.
“As far as quality of life, I find that the ‘next generation’ of clients I work with aren’t focused on accumulating wealth as their source of happiness,” said Jake Norton, a financial planner at his firm Illuminate Financial Planning.
Norton said while he can see younger generation having a harder time doing things like buying a house because of increased student loans, what they value also may be different.
“Millennials in particular value things like work/life balance and choosing careers that make a difference in the world,” he said. “While the standard of living may be lower, I feel the quality of life will be better.”