They call them generations X and Y.
Their shared history has been told and retold through various VH1 specials. They're different, of course: different time periods, different unfortunate childhood fashions, different classic sitcoms. But even though these two generations differ dramatically in age, they have a few similarities. They witnessed and embraced the rise of technology. They said yes to cynicism (they made "Reality Bites" and Daria popular) and no to clear Pepsi. And in the process of shifting from adolescence to adulthood, they accumulated a lot of debt. So much debt that when you combine the two, X and Y may as well be renamed: Generation Debt.
According to a recent article from Investment News magazine, "three quarters (of Americans under 35) owe as much or more than last year." The article refers to a new study by Qvisory which surveyed Americans under 35 on their financial status. The survey found that those under 35 were struggling with a myriad of financial issues including debt, medical costs and an inability to pay beyond the monthly minimum payments. Because of their financial concerns in other areas, only "33% said they have a retirement plan."
Generation Debt is in need of a plan. Greg Salsbury, executive president at Jackson National Life Distributors LLC of Denver, says "(Generation X and Generation Y) will need to save more money than other generations did." Unlike previous generations, Generation Debt most likely will not receive the extensive Social Security coverage their grandparents generation enjoyed. In a different Investment News article, Lisa Shidler says that "67% of (young workers) said that they had less than $20,000 in retirement savings." With present debt mounting and no retirement plan in site, what are Gen-Xers and Gen-Yers supposed to do?
Investment News recommends that young adults seek assistance from a financial planner. If you are a part of Generation Debt, or you’re just looking for some assistance with your finances, WISER has some tips to help you choose a financial planner:
- Read the financial section of the newspaper, look over the ads and call three local investment firms and ask them to send you materials. After reviewing the materials, set-up interviews with financial planners at a few investment firms.
- Interview two or three different financial advisers. Make a list of questions about whatever you are interested in or do not understand in preparation for your meetings. Ask as many questions as you need.
- Beware of someone who promises too much. Find an advisor who will help you develop realistic measurements of success, and who will explain what he or she is recommending and why.
- Look for a financial planner who talks with you about risks, and what you are or are not comfortable with. You want to find someone who listens to you and understands you.
- Ask the advisor how the services he or she provides are paid for and how fees are calculated.
- Find an advisor who will design a realistic and well-diversified investment program for you