Millennials And Gen Xers Are Not Crazy – Baby Boomers Had It Easier Financially And A Big Reason Is Student Debt

Millennials and Gen Xers struggle with higher debt burdens than Baby Boomers, while having lower … [+] home ownership and retirement planning rates.


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A new study finds that Gen X and Millennial families do have it harder than the previous generation did at the same age– in terms of home ownership, debt levels, and retirement planning. When comparing Gen X and Baby Boomer families at mid-career (ages 39 to 54), Gen Xers were less likely to own a home or have any form of retirement plans compared to Boomers of the same ages. The same pattern held true when comparing Millennial and Gen X families during their early-career (ages of 25 to 36), with the rising burden of student debt playing a key role in both of these generational declines. 

The study was conducted by the Employee Benefit Research Institute (EBRI), a research nonprofit based in Washington D.C. backed by large employers, and is based on data from the Federal Reserve’s authoritative Survey of Consumer Finances collected in 2001 for Baby Boomers and Gen X, and 2019 for Gen X and Millennials.

EBRI aimed to look beyond retirement savings (where comparisons are skewed by the country’s shift from traditional defined benefit pension plans to defined contributions plans like 401ks)  to broader measures of financial health, including debt and non-retirement assets. That’s not surprising, given that the big employers who back EBRI are increasingly moving beyond just offering 401(k)s to using financial wellness and student debt payoff programs to attract young workers. 

“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.”

 Rising student loan debt is a major component keeping younger generations from accumulating the wealth they’ll need for retirement, with student loan incidence almost doubling to 42% of Millennial families between the ages of 25 and 36, compared to 24% of Gen X families of those ages. Even more starkly, the incidence of student loan debt among Baby Boomer families aged 39-54 sat at 11%, while Gen X families of those ages had an incidence of 26%.

Net-worth has consistently fallen generation by generation, as the value of assets held by Gen X and Millennials compared to older generations dwindles down, coupled with heavier debt burdens. Between the ages of 25 and 36, Gen X families had a median net worth of $32,000. At this same age range, the median net worth for Millennial families stood at $23,000. This, in spite of Millennials holding a higher median balance in defined contribution retirement plans, and having higher median home equity values ($55,000 for Millennial families between the ages of 25 and 36 versus $40,000 for Gen X families of those ages). The largest factor weighing down on Millennials’ net worths is the massive amount of student loan debt amassed by this generation – a trend powered by the rising costs of college tuition and greater demand for higher education now that more careers require a university degree, or even a graduate degree.

The study also shines light on racial disparities that have persisted across generations and the particular burden student debt has created for Black Millennials.. Early career Black Gen X families’ median net worth in 2001 was the lowest of all racial/ethnic groups, at $14,000. But this racial disparity 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, who had a greater proportion of mortgage and credit card debt. 

There is some good news in this area – home ownership among Black Gen X families was higher than what that racial group saw in the Baby Boom generation. However, home ownership incidence among Black Millennial families was less than half that of Black Gen X families at the same age, with 21.9% and 43.2% incidences respectively, the largest generational drop in home ownership of any racial group recorded in the study.