The wealth gap has continued to grow
Of course, everyone was short on money during the Great Recession and its aftermath. However, once recovery began, it was still slower for millennials. In 2019, studies found that millennials still earned 7% less than they should, whereas the wages of people over 50 had fully corrected. This has led to millennials being more conservative with their savings as they prepare for worst-case scenarios.
According to estimates, millennials and Gen Z will have ten times less accumulated wealth than boomers by the time they hit retirement age. And the wealth gap isn’t isolated to the 1980s. Since 2002, boomers have increased their share of household wealth from around 35% to almost 50%. Millennial wealth may have doubled during the pandemic, but they still account for about 7% of household wealth in the US. That falls short of Gen X’s 29%, which still doesn’t come close to boomers’ 50%.
The wealth gap is also evident when you compare millennials’ financial situation against boomers’ at the same age. 40-year-old boomers in 1989 had a $70,000 median income, $112,000 median wealth, and a $60,000 median debt. Thirty years later, millennials had a $73,000 median income and a $128,000 median debt. Owing more than you earn is a challenging position to build wealth from, especially if the economy keeps crashing every ten years.
