Millennials, Gen X Families Struggling Financially Compared With Prior Generations

WASHINGTON  – A new study from the Employee Benefit Research Institute finds that today's early- and mid-career employees' financial picture looks markedly different from the financial picture of yesterday's early- and mid-career employees. EBRI’s unique methodology in "Comparing the Financial Wellbeing of Baby Boom, Generation X, and Millennial Families: How the Generations Stack Up” contrasts key financial indicators between similarly aged workers in 2019 and 2001 using the Survey of Consumer Finances.

When considering the financial picture of mid-career professionals, EBRI finds that Generation X families were less likely to own a home, have any retirement plan, and were more likely to have debt than Baby Boomers families at the same ages. Further, while Generation X families were more likely to have a defined contribution plan and have higher balances in the plan, they also had higher median debt--including student loan debt--and lower median net worth.

When looking at the financial picture of early-career employees, Millennials face a dramatically different experience than Generation X had.  For example, homeownership rates were lower for Millennials than for Generation X at the same ages.  Even more sobering, the median net worth of Millennial families was lower than for Generation X families of the same ages, while their debt was significantly higher due to substantially rising student loan debt levels.

Impact Of Race And Income

The new study further analyzes generational cohorts by race and income. Notably, the study reveals that early career Black Generation X families’ median net worth in 2001 was the lowest of all racial/ethnic groups, at $14,000. However, the data reveals this has only gotten worse: Black Millennial families' median net worth is only $1,790—again, far lower than that of their White and Hispanic counterparts. This decrease is likely driven by the fact that the student loan debt of Black Millennial families is more than double that of White, non-Hispanic families. Black Millennial family student loan debt comprises 42.8 percent of their debt — more than a five-fold increase from the proportion of student loan debt of Black Generation X families at the same age.

“Generation X and Millennial families are faced with the growing challenge of balancing debt and expenses while also needing to save for retirement,” said Craig Copeland, EBRI Senior Research Associate and author of the report. “These generations may need to take significant actions, including working longer, saving more, and paying down debt, just to gain parity with previous generations.”

Millennials and Generation X are more likely to rely on their own savings when it comes to retirement security and face greater challenges relating to student loan debt than Baby Boomers did at the same age, resulting in heightened financial stress in the workplace. As such, more employers are offering or looking to provide financial wellbeing programs to aid their early and mid-career workforce in addressing their complete financial picture.

“Comparing the Financial Wellbeing of Baby Boom, Generation X, and Millennial Families: How the Generations Stack Up” can be downloaded from  ebri.org/generational-comparison.