In an economically mobile society, it is possible for individuals to improve their economic circumstances through effort, education, investment, and talent. The idea that individuals should have the opportunity to economically advance beyond the circumstances of their birth is a familiar element of the American Dream. It remains to be seen how these factors will affect Millennials' financial circumstances in the long run, including retirement.Įstimated Median Net Worth for Baby Boomer, Generation X, and Millennial Households in the 25-34 Age Range, in 2016 Dollars Finally, Millennials were more likely to have student loan debt that exceeded their annual income. Regarding assets, a significantly lower percentage of Millennials owned homes compared to previous generations at similar ages, but had retirement resources at rates comparable to Generation X and Baby Boomers. Median net worth for the lowest quartile of Baby Boomers and Generation X was around zero, but it was substantially negative for Millennials, indicating that debt was greater than assets for the median low net worth Millennial household. Millennial households had significantly lower median and average net worth than Generation X households at similar ages (see figure), especially among those with low net worth. A snapshot of data that allowed GAO to compare Millennials aged 25-34 to the previous two generations at similar ages showed that Millennial households were more likely than other generations to be college educated however, incomes have remained flat across the three generations, implying that Millennials have not yet benefited from the potential additional lifetime income earned by college graduates. Millennials have different financial circumstances than Generation X (born 1965-1981) and Baby Boomers (born 1946-1964), and in light of flat or declining economic mobility, there is uncertainty about how they will fare financially as they age. Researchers also identified race and geography as key determinants of an individual's economic mobility. This is especially true of the lowest and highest income groups. Using a third measure of economic mobility (intergenerational income elasticity), researchers have found that income in adulthood is linked to how much a person's parents made, and that between one-third and two-thirds of economic status is passed down from parents to children. According to studies GAO reviewed, the share of people making more money than their parents at the same age (absolute mobility) has declined over the last 40 years, and the chances of moving up the income distribution (relative mobility) have been flat over time. Specifically, the Millennial generation (those born between 19) might not have the same opportunity as previous generations had to fare better economically than their parents. Recent research indicates that, across three key measures, economic mobility in the United States is limited.
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