While Americans recently celebrated the 250^th anniversary of their nation’s independence, many are still financially dependent. Matt Welch, a Northwestern Mutual financial advisor based in Rockwall, Texas, recently shared how financial professionals can help clients move to a higher level of financial independence.

The latest 2026 Planning & Progress Financial Independence Study from Northwestern Mutual shows just how exposed many Americans are feeling. For example:

- Only 51% of financially dependent Generation X clients believe that they’ll achieve financial independence.

- Two-thirds of baby boomers said that independence is harder to achieve today than it was for previous generations.

- One in 5 Americans across every generation said they don't expect to achieve financial independence at all.

- Although a $124 trillion Great Wealth Transfer is underway nationally, fewer than 1 in 3 Americans plan to leave an inheritance, and the average is below $50,000.

Why so many Americans feel financially dependent

As to why many Americans are feeling financially dependent, Welch said that the scariest part isn't that people can't build wealth anymore. "it's that most of them are one bad diagnosis, one layoff, one uninsured setback away from needing their parents to fill the gap,” he said.

Inflation and housing costs get most of the blame, and they deserve it, Welch added. But underneath that is a quieter problem: Many people built a financial plan that works only in a best-case scenario.

“Growth without protection is a bet, not a plan,” he said. “The moment a real risk shows up - disability, illness, injury, the loss of a spouse - that bet doesn't pay off, and people end up leaning on family to cover what the plan didn't.”

That pattern isn't new; it's just more exposed now, Welch said. Older generations retired with a pension - a guaranteed paycheck they didn't have to build or manage themselves. That system is largely gone. Many people are quietly counting on a different safety net instead: an inheritance that may arrive smaller, later or not at all.

“Strip it all back, and it's the same issue every time--a plan built entirely around growth, with no protection behind it, survives only until something goes wrong,” he said.

Most financially dependent groups

According to data from Northwestern Mutual's 2026 Planning & Progress Study, Generation Z reports feeling the most financially dependent of any generation (72%), explained Welch. This makes sense, given where they are on their financial journeys. Many are just starting their careers, are still paying down student debt, and haven't yet had the chance to put their own insurance and savings in place, so they may need to lean on their parents more than they'd like.

What's more concerning is that over half (53%) of millennials and one-third (33%) of Gen X still feel financially dependent on their parents, Welch added. Millennials are often juggling the weight of mortgages, young children and their own delayed starts to saving. This makes a single uninsured setback - job loss, illness, or injury - especially disruptive. And, Welch added, many Gen Xers are supporting aging parents at the same time they're raising their own kids, without always having adequate disability coverage for themselves or a long-term care plan for their parents. Boomers and older report the least dependence (17%), but many are still carrying legacy and caregiving responsibilities that ripple through the rest of the family if there isn't a wealth transfer strategy in place.

“Across every generation, the pattern holds,” Welch said. “Without insurance, an emergency fund and planning tools matched to that life stage, one generation's financial gap can become the next generation's financial burden.”

Having protection conversations with clients

These findings underscore the need for advisors to have protection conversations with their clients. Welch said a comprehensive protection conversation should go beyond any single product and cover the full range of tools that keep a disruption from becoming a lasting dependence. Disability income insurance should be at the center of that conversation, since a client's income is typically the asset that funds everything else in their plan, and it's the piece that most people underinsure or skip entirely, he added.

Life insurance deserves equal attention, both as income replacement for a family and as an efficient vehicle for transferring wealth to the next generation, Welch said. Long-term care planning is essential for addressing the cost and logistics of aging before they lead to an urgent, reactive decision. Annuities can play a role in providing a guaranteed income that reduces a retiree's reliance on family support later in life. An emergency savings account can also help people weather a temporary financial disruption.

“Beyond the products themselves,” Welch said, “advisors should also bring the family into the conversation where appropriate, helping clients “loop in” adult children or aging parents so that financial know-how, not just assets, gets passed down. Treating these as an ongoing part of the relationship, rather than a one-time checklist, is what keeps the coverage relevant as life changes.”

Why these conversations matter

These conversations are important because financial independence isn't something that happens once and takes care of itself; it must be protected against the things that can knock it off course, Welch said. Disability insurance and wealth transfer planning are two of the clearest examples of why timing matters so much, he pointed out. Most people don't think about disability insurance until after a health event happens, at which point it's too late; a single uninsured disability can undo years of saving in a matter of months and send someone who was on track toward independence right back to leaning on family.

Wealth transfer is often put off for a different reason, Welch added. It doesn't feel urgent until a death or a major life event forces the issue. By then, the structure that would have made the transfer smooth - an updated policy, the right beneficiaries, a trust - isn't in place, and families are left sorting it out under pressure instead of by design.

“Advisors who bring both conversations up early - before either one becomes urgent - give clients something simple but valuable: the chance to choose how they handle risk, instead of being forced to react to it. That's the whole job, really - not selling protection, but making sure clients get to decide on their own terms before life decides for them,” he said.

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