Financial pressures pushing younger Americans away from parenthood

A new survey by MassMutual reveals that many younger Americans are opting out of parenthood in order to maintain their current lifestyle.

According to the Consumer Spending & Saving Index, nearly a quarter of Millennials and Gen Z adults without children do not plan to become parents, with financial constraints cited as the primary reason.

The survey, conducted by PSB Insights in July 2024, highlights that 43 percent of younger adults prioritize financial freedom, while an equal percentage report that they simply cannot afford the cost of raising children. Meanwhile, nearly one in three Gen Y and Gen Z respondents who prefer a no-kids lifestyle say they do not like the idea of leaving today's social and political world in the hands of future generations.

“With today’s financial stressors, it is understandable why there is a growing trend among young adults to prioritize financial security over parenthood,” Paul LaPiana, head of brand, product, and affiliated distribution at MassMutual said in a statement. He added that this trend reflects the increasing importance of financial stability for achieving long-term goals.

The report also sheds light on the anxieties faced by parents. Despite 73 percent of respondents indicating that they prepared financially for parenthood, including 38 percent who ramped up their savings, over half (51 percent) expressed concerns about affording basic family expenses. Food and clothing topped the list of child-related expenses causing financial strain, with 57 percent and 51 percent of parents, respectively, identifying these as major costs.

In addition to concerns about child-rearing costs, nearly two-thirds of parents shared worries over rising tuition (65 percent) and inflation (63 percent). That's prompted 47 percent of parents sending children to college this year to expect higher college costs than before, a significant jump over just 29 percent expecting bigger expenses.

The survey also highlights ongoing challenges around retirement savings. Forty-eight percent of non-retired Americans feel they lack sufficient savings to retire by their desired age, with Generation X especially concerned. Half of non-retired respondents are contributing 6 percent or less of their income to retirement.

Nearly half of Gen Z respondents said they do not set aside a fixed amount every month for their retirement, while one-fourth (24 percent) said they're not contributing anything at all toward their nest egg.