American millennials think they will be rich The data suggest they probably won ’ t be
The worst thing millennials could kill
American millennials think they will be rich The data suggest they probably won ’ t be
MORE THAN half of American millennials , the generation of people born between 1981 and 1996 , believe that they will one day be millionaires ; one in five think they will get there by the age of 40 . These are the findings from a survey conducted in 2018 by TD Ameritrade , a financial-services company .
But a working paper by the Brookings Institution , a think-tank , offers a sobering antidote to this youthful optimism . It finds that millennials are less wealthy than people of a similar age were in any year from 1989 to 2007 . The economic crisis of 2008-09 hit millennials particularly hard . Median household wealth in 2016 for 20- to 35-year-olds was about 25 % lower than it was for the similar-aged cohort in 2007 .
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to obtain an employer-provided pension . Only 55 % of this generation have access to retirement plans , compared with 77 % of Generation X and 80 % of babyboomers . Moreover , those who do have employer pensions are more likely to have defined-contribution pensions than defined-benefit ones , meaning that they bear the risk if investment returns disappoint .
And as America seeks to plug its longterm fiscal shortfalls , millennials will have to bear the burden of any future cuts to Social Security and Medicare . All of this helps to explain why the share of people aged 25 to 34 who are living with their parents has increased from 10 % in 2000 to about 15 % today . That is not quite the high life millennials imagined .
But all is not lost . Millennials are living longer and are the best-educated generation in history . Taken together , this could yet mean that the youngest millennials , who have been less scarred by the crisis , could contribute towards their retirement pots for longer . Then there is mum and dad : even if they don ’ t become millionaires , millennials will one day inherit from their parents , and that may help redress their relative poverty .
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American millennials are comparatively poor because many of them came of age during the financial crisis , when demand for labour was low and borrowing money became harder . The recovery has been slow , which has further reduced millennials ’ long-term earning potential . A paper by the Federal Reserve , published last year , found that millennial household incomes were 11 % lower than they were for people in Generation X ( those born between the mid-1960s and 1981 ) at a comparable age ; they were 14 % lower than for baby boomers at the same point in their lives . A growing number of young people have taken on debt to finance their studies . And because real wages have not kept up with inflation , the cost of living has risen .
Worse still , the Brookings paper reports that young people ’ s prospects for accumulating wealth in old age are grim . Millennials do more freelance and part-time work than other generations did , which makes it more difficult