The income and wealth of Millennials is lagging behind that of older generations at the same age, according to a study by the Federal Reserve Bank of St. Louis. The study examines the incomes and net worth of older Millennials, defined as those born from 1980 through 1989, and compares them to the finances of older generations when they were the same age.
The median net worth of the typical Millennial household is 34 percent less than expected when compared to older generations. They are behind by $12,000. "For someone at the beginning of adulthood, this is a lofty sum to miss out on," writes Ana H. Kent, a Fed policy analyst and one of the researchers. One of the reasons for the lower net worth of Millennials is that fewer are homeowners. Their homeownership rate is 4 percentage points below expectations.
But Millennials aren't suffering equally. The median household income of those with a bachelor's degree is 7 percent higher than expected, and their median net worth is only 6 percent below expectations—$55,000 versus an expected $58,000. The picture is not as rosy for Millennials without a bachelor's degree. Their median household income is 9 percent below expectations. Even worse, their median net worth is a stunning 44 percent below expectations—$14,000 versus an expected $25,000.
"For this generation of older millennials, having less money than older generations at the same age could be very problematic," concludes Hunt.
Source: Federal Reserve Bank of St. Louis, Are Millennials a Lost Generation Financially? and The Millennial Wealth Gap: Smaller Wallets than Older Generations
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