The first generation to come of age in the new millennium is doing so with less cash and more debt than Gen-Xers had at the same age. That’s according to research from the St. Louis Fed, which analyzed household assets and debt to compare millennial households’ finances in 2016 to those of Gen X in 2001.
A millennial household in 2016 had an average net worth of $90,000, compared to an inflation-adjusted $130,000 for a Generation X household in 2001.
One glaring difference is how much the different generations had in home equity, with Gen X households holding an average $78,000 in home equity, while the millennial had $69,000.
One relative bright spot for millennials was retirement savings, as they have about $2,000 more socked away on average than Gen Xers had at the same age.
Debt is a big concern, especially student loans. The average student loan debt owed by millennials was $14,700, compared with an inflation-adjusted $4,200 for Gen X, the researchers found.
But all is not lost for today’s under-35 set, and catching up with — or surpassing — Gen X is possible. More millennials have pursued higher education than Gen Xers did, the researchers noted, meaning they’ve put off major life events like getting married or buying a house. The younger set may be entering the labor force later in life, but that degree could bring higher wages that build wealth more quickly.
“Society is in a state of transition as the life cycle continues to extend. People have been living longer and retiring later, and with that has come a multitude of other demographic shifts,” St. Louis Fed researchers YiLi Chien and Paul Morris wrote in the report.
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