FANews
FANews
RELATED CATEGORIES
Category Retirement
SUB CATEGORIES Annuties |  General |  Savings & Investments | 

Concern over unemployed youth draining parents of savings

10 July 2012 Jason Garner, Management Consultant at acsis
Jason Garner, Management Consultant at acsis

Jason Garner, Management Consultant at acsis

A recent US survey revealed that 62% of young adults between the age of 19 and 22 rely on their parents for financial assistance. According to Jason Garner, Management Consultant at acsis, this trend is more than likely occurring in South Africa too, as i

Garner says that in South Africa, many young adults are not finding jobs after high school or university in order to assist themselves financially, thus relying on their parents for longer than originally planned. He explains that as youth unemployment will continue to be an issue for years to come, it is necessary for consumers to start planning for this additional expense earlier in life, as to protect themselves financially if they do land up in this situation.

“If not, many will find themselves spending their hard earned retirement savings trying to support themselves along with children who they did not plan to support after a certain time period. As we are currently experiencing a low return environment, financial plans should be regularly reviewed to ensure that this significant additional expense is correctly planned for.”

He says that because of the current financial situation most find themselves in at the moment, children are already leaving home later in life, as they cannot afford to support themselves immediately as a result of being underpaid or unemployed. “Parents who did not plan to support children for longer than originally expected are more than likely to find themselves in major financial trouble if the situation is not properly planned for. Not many families can withstand a long-term drain on assets that probably already took a blow during the market meltdown of a few years ago.”

Garner says that adults who still live at home and are neither working nor studying are a worldwide phenomenon, and can affect economies negatively if it continues. “In the United States the situation where parents are left struggling to support children who return home laden with student loan debt and facing few job prospects has been labelled ‘full nest syndrome’.

“This situation highlights the need for financial planning that is appropriate for the type of financial climate consumers are currently experiencing. A planner plays a vital role in helping clients analyse their current situation and determining how to articulate their life and financial goals appropriately. Consumers need to ensure that financial plans are correctly created for their individual needs at a specific point in their lives. For instance, parents that anticipate children will not be moving out soon or will be returning after college or university need to plan and save accordingly,” concludes Garner.

Quick Polls

QUESTION

Have you seen insurers implementing rate adjustments / risk management around climate change?

ANSWER

Yes
No
fanews magazine
FAnews June 2024 Get the latest issue of FAnews

This month's headlines

Understanding prescription in claims for professional negligence
Climate change… the single biggest risk facing insurers
Insuring the unpredictable: 2024 global election risks
Financial advice crucial as clients’ Life policy premiums rise sharply
Guiding clients through the Two-Pot Retirement System
There is diversification, and true diversification – choose wisely
Decoding the shift in investment patterns
Subscribe now