Retirement & Financial Planning Report

With the oldest of the Millennial generation turning 40 this year, that cohort still lags prior generations at a similar point of life in retirement preparation although they are catching up in other ways that they have been behind, says a new report.

The report from the Center for Retirement Research—using data from 2019 and thus not reflecting any effect from the pandemic—shows that the generation born between 1981 and 1999 got off to a slow start for reasons including higher levels of student debt than prior generations, the burst of the bubble as the oldest of them were starting their careers, and the Great Recession that hit a decade later.


It said that the gaps are starting to close as measured by indicators such as home ownership and percentages who are married at a given age—two characteristics that commonly are linked—with above 60 percent owning a home by age 38, virtually the same as the Baby Boom and Generation X generations.

However, it said Millennials remain behind pace in retirement preparation by measures such as the ratio of net wealth to annual income and the ratio of debt to income. Student loan debt still is a main factor; 37 percent of them in their late 30s still are paying off such debt, compared with just 13 percent of Boomers and 19 percent of Gen Xers at the same point.

“They are saving for retirement at the rate of earlier generations, but student debt is a constant drag on their balance sheet. Millennials’ lack of wealth in their 30s relative to earlier cohorts should be a source of great concern, given that they will live longer than previous cohorts and will receive less support from Social Security,” it said.

One factor working in their favor, it added, is that Millennials are the most educated generation, with above 40 percent of both men and women having a college degree.

“A college education continues to have significant economic value. Among Millennials, median earnings in 2018 were two-thirds higher for college graduates than for high school graduates; and their unemployment rate was 4 percentage points lower. One would expect that this higher level of education would bode well for work and earnings,” it said.

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