Wealth has eluded many millennials, who are worth about 25 percent less than earlier generations at the same age, according to the latest research.
"The Great Recession in 2007-2009 significantly reduced household wealth, which has only slowly recovered since then," wrote William G. Gale, an economics and tax expert, in a Brookings Institution report.
The major factor that earlier generations did not face?
"Millennials generally have higher student debt than prior generations," Gale wrote.
Student debt is not the only burden, the research found. Not only did the financial crisis and Great Recession hinder the job market for that age group, many are or will be employed in the "contingent workforce," also called the gig economy, which does not come with the same benefits packages their parents and grandparents enjoyed. Those positions have "weaker retirement benefits" than earlier generations, Gale wrote.
I%27ve been paying on my 21k student loan since 2005. In 14 years, I%27ve paid $16k to Navient (formerly Sallie Mae). I just got a notice that a whopping $3,000 has been taken off my loan. That%27s a profit of $13,000. #StudentLoans #studentloanforgiveness— LostMoonOfPoosh (@OfPoosh) March 28, 2019
Less wealth means a slower start toward the milestones of adult life.
"They are marrying, buying homes, and having children later," the report stated.
But wait, there's more bad news for those born between 1981 and 1996.
?Millennials will have to manage their retirement savings more than their elders — meaning they will be responsible for their own saving and investing — and will likely live longer. Social Security and Medicare benefits remain an uncertainty as politicians talk about decreasing or privatizing them to cover the treasury shortfalls of older generations.
"They face an economic future with projections of lower rates of return and economic growth than in the past. All these factors make accumulating sufficient funds for retirement more difficult for millennials relative to previous generations," Brookings stated.
I%27ll admit I am just tired of paying student loans. If some rich millionaires, or companies wants to step in and take them over I%27ll let you. It can be just between us so no one else will know. OR you can tell everyone how kind you are and I%27ll back you up. #studentloans— Stephen (@flooah) March 27, 2019
Another factor affecting millennial wealth is the disparity in minority wealth.
The millennial generation has grown in diversity, with about 44 percent of millennials identifying as a race or minority other than non-Hispanic white. That's an increase from 25 percent in older generations. But because minorities traditionally have had less wealth than whites, increased numbers in the millennial cluster could diminish that generation's overall wealth.
Gale wrote that "such differences could serve either to raise or reduce wealth gaps between whites and minorities in the future."
However, "minorities in recent years faced different economic and social conditions than did minorities in the past, yet wealth differences between whites and minorities, controlling for observable characteristics, have risen, not fallen, over time.
"If this trend continues, wealth inequality will continue to grow, which will make it that much harder for minorities to save adequately for retirement."
If I traded my mortgage payment for my student loan debt. I could have my student loan paid off in 3 years, 7 months. 🤦🏽♀️ 🤷🏽♀️ #studentloans— NeNe (@justmilaj) March 27, 2019
The Brookings' report comes from the U.S. 2050 research project under the Peter G. Peterson Foundation.