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Being debt free – not wealthy – is how young adults define financial success

A new Merrill Lynch study shows adults under 35 tend to value financial independence over getting rich


In a new survey by Merrill Lynch, almost 6 in 10 respondents under 35 said being debt free is how they define financial success. And the second most popular result among this group was being financially independent from their parents.

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Forget becoming wealthy. Most adults under age 35 are defining financial success as merely being debt free.

A Merrill Lynch study on financial independence among early adults found that 81 percent of households under age 35 carry some form of debt. The most common forms are credit cards and student loans, each affecting 45 percent of early adult households. Auto loans and mortgages followed, at 39 percent and 28 percent respectively.

So perhaps it’s no surprise that when asked how they define financial success, the top-ranking response was being debt free, reported by almost 6 in 10 respondents (59 percent). Consequently, among the quarter of early adults with a 401(k) account who had made an early withdrawal, the top reason cited was to pay off credit card debt.

Being financially independent from their parents was the second most popular response, at 44 percent. Currently, almost 6 in 10 early adults say they’d be unable to afford their current lifestyle without parental support (58 percent).

In contrast, only 22 percent of respondents age 18-34 said financial success meant becoming wealthy.

Merrill Lynch’s research drew upon a nationally representative survey of more than 2,700 adult respondents in the U.S., with a focus on Americans ages 18–34. Conducted in October 2018, the survey results were released April 20.

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