How Does the Wealth of Millennials Stack Up Against Baby Boomers at Their Age?

Anchiy / Getty Images

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

The American Dream appears to have run out of gas before reaching the millennials. After all, those born between 1981 and 1996 are the first generation in history to be worse off financially than their parents.

Cynics chalk it up to the younger set’s apathy, entitlement or laziness, while their supporters cite modern roadblocks like student loan debt, astronomical housing prices and stagnant wages.

But before you waste time pondering the reasons that Gen Y fell short, is it even true that boomers were wealthier in their 30s and 40s than millennials are today? Here’s a look at how boomers and millennials compare.

Population Size and the Myth of Lopsided Wealth Distribution

In 2019, just as the youngest millennials were entering the workforce, the Washington Post reported on generational wealth statistics that fueled the common assumption that millennials are worse off than their parents were at their age.

The report showed that baby boomers — born between 1946 and 1964 — controlled more than 20% of the national wealth when they were in their early 30s, but that similarly aged millennials held only 3.5%.

Taken at face value, those are case-closing numbers, but they omit important context. There were far more boomers at peak age than millennials — about 78.8 million to 62 million, according to the Pew Research Center — which means the boomers had 17 million more pairs of hands to grab money. Boomers made up a much larger share of the population and remained the largest living generation until millennials finally overtook them in 2019, the year the Post article was written.

University of Central Arkansas economist Jeremy Horpedahl has studied the issue for years, and his analysis found that when adjusted for population size, millennials were as wealthy as boomers at age 30 on a per capita basis.

A Little More Income, a Whole Lot More Debt

Another big part of the story is what each generation earned vs. what it owed.

According to Bloomberg, the median 40-year-old boomer in 1989 earned $70,000 a year and had $60,000 in debt, adjusted for inflation. The median 40-year-old millennial in 2021 had a $73,000 income and $128,000 in debt.

Although millennials owe more than twice what their parents did, stagnant wages leave them with just $3,000 more per year to deal with the burden, making it much harder for the younger set to save, invest and enjoy an elevated quality of life.

The Many Variables of Wealth

Debt and income are just two measurements of the complex concept of wealth. In September 2023, a University of Cambridge study published in the American Journal of Sociology revealed how the two generations compared in some of the others.

The study, which examined the finances, jobs and family lives of more than 6,000 boomers and 6,000 millennials in the U.S., painted a bleak picture for team millennial:

• 14% of millennials had a negative net worth by 35 compared to just 8.7% of boomers whose debts exceeded their assets.
• By 35, just 43% of boomers held debt of any kind compared to 68% of millennials.
• About 49% of millennials owned a home by 35 compared to 62% of boomers.
• Only 6% of boomers lived with their parents at 35 compared to 10% of millennials.

Population Size Aside, Boomers Were Probably Better Off

People accumulate and forfeit wealth in many ways, including through income, debt, homeownership and investments. The Cambridge study confirms many analysts’ conclusions — that it’s harder for millennials to build and maintain wealth than it was for their parents at the same age.

“Millennials now have to deal with a different financial environment than boomers did in their 30s and 40s,” said Michael Hammelburger, a certified financial advisor and CEO of The Bottom Line Group, a cost segregation firm in Baltimore. “Boomers benefited from more accessible higher education, more affordable housing and a stronger job market. On the other hand, issues faced by millennials include mounting student loan debt, increased housing expenses, and a more competitive job market. These variables have affected the way millennials have accumulated wealth, frequently making it more difficult for them to reach the same financial milestones as boomers at comparable ages.”

Rich Millennials Are Richer and Poor Millennials Are Poorer

The economist Horpedahl’s yearslong analysis found that wealth was equal between boomers and millennials on a per capita basis, but the Cambridge study revealed a much wider gap between each generation’s haves and have-nots.

It’s a Great Time To Be a High Earner

By age 35, just 7.3% of millennials had gone into prestigious professional careers like law and medicine after college, far fewer than the 17% of boomers who entered big-salary fields. However, the millennials who did pursue high-paying careers live much higher on the hog than boomers who followed the same path at the same age. Thirty-five-year-old millennials in the 90th wealth-distribution percentile are 20% richer than affluent boomers at the same age.

Modest Working-Class Incomes Became Poverty Wages

In short, fewer millennials get rich, but those who do get richer. However, those who don’t are more likely than their parents to work in low-skill service-sector jobs, which are now mostly low-income positions that preclude them from reaching middle-class milestones. Service-sector millennials are more likely than their boomer counterparts to have a negative net worth and less likely to own a home. When boomers were approaching middle age, construction workers, hair stylists, factory workers and other typical working-class people earned enough to move out, buy a house and build assets, but modest incomes don’t go nearly as far today as the middle continues to shrink.

Share This Article: