Millennials have a steeper hill to climb to afford the same lifestyle their boomer parents enjoyed – Yahoo Finance

Millennials and other young Americans will be hard pressed to capture the wealth and success enjoyed by baby boomers.
Boomers, once the largest generational group before millennials edged them out, became one of the most economically influential generations on the backs of booming housing and stock prices in the 1980s. The wealth they accumulated might be a once-in-a-generation phenomenon, unlike that of previous generations and a far cry from what future generations will likely ever achieve.
That's according to research from Luis Bauluz, assistant professor of economics at CUNEF University in Madrid, and Timothy Meyer, a doctoral student at the University of Bonn. The working paper found that the wealth boom that's kicked into high gear since the ’80s has widened the chasms between the rich and the poor and the young and the old.
Specifically, the average wealth gap between those 60 and older (mostly boomers) and those 40 and younger (mostly millennials, plus Gen Z) has nearly doubled since the 1960s and 1970s. It makes sense that older generations, who have had more time to accumulate wealth, would have a thicker financial padding than their children. But boomers have been extraordinarily better off, while the wealth of those ages 20 to 39 has declined.

The research, which tracked U.S. household finances among those born since 1900, found that all generations typically started from similar levels of wealth—about 1.5 times their income by age 30. By age 60, most had built wealth equivalent to five to six years of their income. But the average boomer—born from 1940 to 1960—had 10 times their income by age 60. That means the average older boomer was 65% richer than previous generations by the time they hit retirement age.

The findings highlight "a drastic increase in wealth inequality between age groups" that puts younger generations on the back foot when it comes to saving and amassing wealth and equity even near the same level. It's a daunting task for millennials to make up such ground, having graduated into the Great Recession only after weighing down their economic mobility with student loan debt. Younger Americans have struggled to build wealth amid a housing crisis and record inflation threatening to drive another recession.
Intergenerational inequality is also at play. Wealth gains since the 1980s did miss the poorer half of the boomer age group, benefitting those at the top end and thus deepening the fissure between the poorest and the richest within the generation. And the study revealed that the bottom half of all age groups holds less wealth today than four decades ago—which also partly explains why generational wealth gaps are widening. "Wealth in the U.S. is aging," the researchers write.
But boomers have, in large part, been able to benefit from an economic landscape that's escaped the youngest generations.
Bauluz and Meyer noted that younger generations of adults are saving more now in their prime middle ages in what they called "life-cycle saving reshuffling," an attempt to scale the steep mountain ahead of them before retirement.
To truly reach the level of wealth boomers have amassed, however, millennials and younger Americans will need to look to the continued rise of asset valuations, which the study points out is largely dependent on inflation.
The research not only presents a compelling argument for the idea that millennials will never be as wealthy as their parents, but it does a lot to clear the entire generation of the murders of spare bedrooms, diamonds, and so many other industries.
This story was originally featured on
More from Fortune:
I proudly wake up at 8:59 a.m., one minute before starting my remote work job. There are thousands like me, and we don’t care what you think
You might have Crohn’s disease, rheumatoid arthritis or lupus because your ancestor survived the Black Death
Housing’s stunning downfall in one chart: Prices have plunged in 51 of these 60 cities, and there’s much further to fall
Let’s not circle back on that: These 10 corporate buzzwords are the most hated in America
“In this softer macro, and with a recession likely on the doorstep, Big Tech management teams need to quickly adjust…or risk losing their luster,” Wedbush’s Dan Ives said.
Jeff Goldblum is being considered for a key role in Universal’s long-gestating plans to make a movie out of Tony-winning Wizard Of Oz musical Wicked, Deadline reports. Although nothing’s set in stone, and a deal is still reportedly a long way off, Goldblum is being considered—would you believe it?—for the role of the musical’s charismatic, manipulative, enigmatic, and ultimately self-serving Wizard. Shock of shocks, we know.
Rishi Sunak's wife is a billionaire's daughter who has divided her life between three continents.
(Reuters) -Polish national airline PLL LOT on Friday asked a U.S. judge to declare it was a crime victim in the Boeing 737 MAX criminal case, a move that could make the airline eligible for significant compensation. U.S. District Judge Reed O'Connor in Texas ruled last week that people killed in two Boeing 737 MAX crashes are legally “crime victims.” LOT argued it should have the same rights in the case as victims' families.
Geng Quanrong, the Chinese national who made international headlines for allegedly killing his Nigerian ex-girlfriend because of heartbreak, pleaded not guilty to the crime during his re-arraignment on Thursday, according to local reports. The 47-year-old textile businessman has been charged with culpable homicide for allegedly fatally stabbing his 22-year-old ex-lover, Ummukulsum “Ummita” Buhari, in her shared home in Janbulo quarters, Kano state, on Sept. 16. Earlier reports say he confessed to the crime, saying Buhari had broken her promise to marry him even after he had spent money on her.
At least 120 people died and more than 100 were injured in a stampede in Seoul on Saturday in celebration of Halloween, according to a local officials.
A woman claiming to be the stepdaughter of suspected Paul Pelosi attacker David DePape says he was abusive toward her and her siblings, but he tried to be 'a good person.'
Julianna Stout, former Miss Rhode Island, has pleaded guilty to lying to prison officials in an effort to see her husband in an ICE facility during COVID-19.
Bodies line streets of South Korea’s capital, with most of the dead teenagers and young adults
(Reuters) -Chrysler parent company Stellantis NV said Friday it has offered voluntary buyouts to some of its 13,000 U.S. salaried employees. Salaried workers age 55 or older who have been with the automaker at least 10 years are eligible. The world's No.4 carmaker, created early last year from the merger of PSA and Fiat Chrysler, said the offer was "part of our transformation to become a sustainable tech mobility company and the market leader in low-emission vehicles."
David DePape was identified by police Friday as the suspect in the assault on Paul Pelosi at Speaker Nancy Pelosi's San Francisco home.
The largest jackpot — $1.586 billion on Powerball — was split three ways on Jan 13, 2016. Each worth almost $530 million.
Videos show body bags and people being treated on the streets, surrounded by large crowds.
Why did Kenyan police officers shoot dead Arshad Sharif, one of Pakistan's most prominent journalists?
The high commissioner of the Republic of Uganda, Nimisha Madhvani, visits temples in Peterborough.
The video shows the dog trotting down the streets holding the head in its jaws by the neck.
At least 146 Halloween parade attendees died after a stampede erupted in South Korea, according to multiple reports.
A dangerousness hearing was held Thursday afternoon in Middlesex Superior Court in Woburn for Roy Booth Jr.
Economic consultants for California's first-in-the-nation reparations task force recently presented calculations for what redressing past harms for the descendants of slaves might look like.
Burbank, CA – If you felt the swoosh of a ninja star just passing your ear, then you might be visiting the city of Burbank as they tote the bragging rights with the only museum in the world dedicated to the martial arts; the Martial Arts History…


Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button