The age at which life, money, and the future start to feel “real” is officially 27 years old, according to new research.
A recent study of 2,000 Americans, evenly split by generation (500 Gen Z, 500 millennials, 500 Gen X, and 500 baby boomers), found that adulthood does not automatically begin at 18.
Today, most people believe that the definition of “adulting” is simply paying your own bills (56%). Others say that being financially independent (45%) and prioritising responsibilities over personal life or enjoyment (38%) are key markers of entering adulthood.
In fact, moving out of their parents’ or guardians’ home (46%) and securing their first job in their chosen field (28%) are two of the top milestones that made Americans feel like adults.
Despite this, 11% of Gen Zers do not yet feel like adults.
The survey, conducted by Talker Research on behalf of Life Happens, explored Americans’ financial highs and lows, as well as advice from older generations for young adults.
Results show that Americans start to take their finances seriously around the age of 28. Across all age groups, older generations regret not paying more attention to their finances in their twenties (76%).
When it comes to financial milestones such as getting a credit card, budgeting, and opening a savings account, millennials were ahead of schedule, having accomplished these tasks before the age of 28. Both Gen X and baby boomers opened savings accounts at an average age of 26.
Millennials just made it in time, purchasing life insurance at an average age of 28, while Gen X and baby boomers were both in their thirties when they took out life insurance (33 and 34, respectively).
Interestingly, Gen Z is well ahead in terms of paying their own bills, obtaining a credit card, learning how to budget, and opening a savings account—all around the age of 22.
Yet, over half (53%) of Gen Z respondents have not contributed to their 401(k) or retirement plan, and 49% have yet to purchase life insurance.
The good news is that Gen Z is already taking much of the older generations’ financial advice to heart: start saving early (64%), create a budget (46%), and build credit as soon as possible (41%).
However, the next two biggest pieces of advice—contribute to a retirement fund (34%) and get life insurance while young and healthy (18%)—seem to be less of a priority.
Nearly two in five Americans (39%) believe they are not currently financially stable. While most hope to achieve financial stability by the age of 46, 41% do not believe they will ever reach this goal.
This sentiment is least common among Gen Z, as only 7% think they will never be financially stable. However, that number increases with each generation: 30% of millennials, 53% of Gen X, and 66% of baby boomers share the belief that financial stability may never be attainable.
At the end of the day, 42% of all respondents found that adulthood is harder than they had anticipated.
“While it’s concerning to see that so many young people are not contributing to their retirement or purchasing life insurance, it’s never too late to start making those moves,” said Kevin Mayeux, CEO of the National Association of Insurance and Financial Advisors. “More than half (56%) of all Americans surveyed have never worked with a financial professional. Working with someone who is experienced and trained in managing your finances can help you not only feel more secure today, but also for years to come.”
The survey also asked Gen Zers what they most want older generations to understand about finances. One respondent said, “The economy is at a point where having financial security feels impossible, and like it’s not worth attaining.”
Others emphasised the importance of “understanding and adapting to the rapid changes in financial technology” and added, “buying a house is not as financially achievable at this time.”
Overall, the majority of Gen Z (81%) feel pressured to be further ahead financially than they are.
The survey also posed a few hypothetical questions and found that finances are a top concern. If they were given an additional $1,000, most respondents (60%) would put it into their savings account. Another 14% would equally consider contributing to their 401(k) or spending it on a holiday.
Interestingly, Americans would rather spend $15 a month on life insurance (59%) than on a standard Netflix subscription (23%).
“Gen Z’s struggles and anxieties, paired with the fact that 71% of Americans surveyed believe that being an adult is harder today than it was 10 years ago, really underscores the importance of being financially prepared for whatever the future might hold,” said Brian Steiner, Executive Director at Life Happens. “Costs are rising, salaries are staying stagnant and hope is decreasing. While the future is unpredictable, your financial stability doesn’t have to be, by preparing for the future with life insurance.”
