Why Millennials and Gen Z Are Delaying Traditional Milestones—and What Investors Should Do Now
Mellisa Soehono, 29, shares a sentiment many young adults echo: the desire to start a family someday, yet feeling financially unprepared to do so. “I do get a little bit of ‘FOMO’ seeing my friends around my age getting married, settling into a new home — and I’m just not in a place where that is really realistic for me,” she says. Mellisa’s story is far from unique. Recent data from the U.S. Census Bureau reveals a striking trend—fewer 25- to 34-year-olds are hitting traditional adulthood milestones such as marriage, parenthood, full-time employment, and moving out of their parents’ homes.
The Shift in Adulthood Benchmarks: A Historical Perspective
About 50 years ago, nearly half of young adults aged 25 to 34 had achieved these milestones. Today, less than a quarter have. This dramatic shift signals more than just changing social norms; it reflects deep economic pressures reshaping life decisions. The median age for first-time homebuyers, for example, has climbed to 38 in 2024—a stark contrast to the late 20s in the 1980s, according to the National Association of Realtors.
Why Are These Milestones Delayed?
Several factors contribute to this delay:
- Rising Housing Costs and Rent: Inflation has pushed housing prices and rents to record highs, intensifying the affordability crunch.
- Student Debt Burden: Many young adults, including Mellisa, carry significant student loan debt, which limits their financial flexibility.
- Economic Instability: The need for greater financial security before starting a family or committing to marriage has become a priority.
Douglas Boneparth, CFP and president of Bone Fide Wealth, highlights that the “economic bar” for starting a family has risen. Many young adults now view marriage and children as goals to pursue only after achieving financial independence.
What This Means for Investors and Financial Advisors
This generational shift has profound implications for investors and financial advisors:
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Rethink Target Markets: Traditional financial products aimed at young adults—such as mortgages or family insurance plans—may need retooling. Advisors should consider offering solutions that address delayed milestones, such as financial planning for debt management, career development, and long-term wealth accumulation.
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Focus on Flexibility: Given the economic uncertainties young adults face, flexible financial products (e.g., adjustable-rate mortgages, income-driven repayment plans for student loans) may resonate more.
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Incorporate Behavioral Insights: Understanding that younger clients may prioritize career growth and financial independence over immediate family formation can help advisors tailor advice and build trust.
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Prepare for a Shift in Retirement Planning: With delayed family formation, younger generations might also delay wealth transfers and inheritances, affecting estate planning strategies.
Unique Insight: The Rise of Multi-Generational Living and Its Investment Implications
An emerging trend not often discussed is the rise in multi-generational households. According to Pew Research Center, the share of adults living with their parents has increased significantly over the last decade. This shift creates new opportunities in real estate and consumer sectors—think larger homes designed for multiple generations or services catering to blended households.
Investors should watch for growth in companies innovating in these spaces, such as real estate developers focusing on adaptable housing or tech firms creating solutions for multi-generational communication and caregiving.
What’s Next? Actionable Steps for Investors and Advisors
- Invest in Affordable Housing Solutions: With housing affordability a critical barrier, funds and companies innovating in affordable housing and rent-to-own models may offer growth potential.
- Advocate for Financial Literacy: Advisors should champion education on managing student debt and budgeting for long-term goals, helping clients overcome financial barriers.
- Monitor Policy Changes: Keep an eye on government policies affecting student loans, housing subsidies, and family benefits. Changes here can dramatically impact young adults’ financial decisions.
Final Thoughts
The delay in traditional adulthood milestones is not merely a demographic curiosity—it’s a signal of evolving economic realities that demand a fresh approach from investors and financial advisors. By understanding these shifts and adapting strategies accordingly, you can better serve younger clients and position your portfolio for the trends shaping the next generation’s financial future.
For those looking to stay ahead, the message is clear: It’s time to rethink what adulthood means—and what it means for your investments.
Sources:
- U.S. Census Bureau, American Community Survey
- National Association of Realtors, 2024 Housing Report
- Pew Research Center, Multi-Generational Living Trends
- CNBC Financial Advisor Council insights from Douglas Boneparth, CFP
Source: Young adults reaching key milestones notches significant drop