In a report with implications not just for the Millennial generation but also for their parents who often provide them with financial help, the GAO has found that Millennials are behind financially compared with the same stage of life of the two generations proceeding them.
The report compared the financial condition of Millennials in the age 25-34 range with the same period of life for the Generation X and Baby Boom generations. In terms of average income, Millennials are about mid-way between the other two and in terms of median income, they are about the same as Boomers, with both behind Generation X. However, GAO noted that higher percentages of Millennials have college educations than either of the two prior generations, suggesting that they are not yet seeing the traditional income benefit of being more highly educated.
GAO further found that Millennials have lower net worth at this point, largely due to higher rates of student debt and lower levels of home ownership. It estimated that about 43 percent of Millennial households owned homes, compared to 51 percent of Generation X households and 49 percent of Baby Boomers at the same stage of life.
“As a result of lower rates of homeownership, Millennial households had less mortgage debt, but also less home equity, compared to households in other generations at similar ages. Home equity has historically been an important source of retirement security as people age. It is unclear whether Millennial households will reach similar rates of homeownership as previous generations, but it is possible they may be more likely to buy homes at older ages compared to previous generations,” GAO said.
On the positive side, it said, similar numbers of Millennials have retirement resources as the prior two generations and their average savings are similar to those of Generation X at the same stage. Their savings are above those of Baby Boomers at a comparable point but that generation was more likely to have defined benefit retirement plans, GAO said.
Many federal jobs qualify for student loan debt repayment help up to $10,000 per year. Under 5 U.S.C. 5379, agencies may repay the student loans of federal employees in order to attract or keep highly qualified individuals. These repayments may not amount to more than $60,000 in total.
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