A new study purports to show that, while Millennials are as poor as young people ever are these days, they may not be able to expect to become rich as they age as young Americans once expected.
According to the study, at 1 in 7, Americans who are 65 or older are far more likely to have amassed a million dollars or more for retirement compared to those under 40, who have only a 1 in 55 chance of being able to amass a million or more for their golden years.
The study released this week by economists at the St. Louis Fed’s Center for Household Financial Stability finds that the “wealth gap” between Millennials and older Americans is growing wider every year.
The authors say that since the Baby Boomer generation, incomes have fallen and expectations have grown dimmer as the wealth gap grows. For instance, the authors found that people born in 1970 have a quarter less income and 40 percent less wealth than those born in 1940.
As advice to Millennials, The Washington Post notes that young people should delay buying a house until they are older and at an age more advanced than homeowners of previous generations. This, they say, would help Millennials stay solvent longer. But this also seems to confirm the study’s findings by showing that younger people should not expect to be able to own their own home at the same young age as previous generations.
Of course, many studies have shown that being married and maintaining a family increases the wealth of all involved. Marriage is one way to reach that critical mass for retirement. One recent study, for example, found that married couples have as much as four times the wealth as single or divorced people.
But even for the devoted family, the level of that wealth has slipped for Gen Xers and later generations.
As the new study notes, in 1989, older families had 7.6 times as much median wealth as younger families did then. But by 2013, that gap had grown to 14.7 times.
Is this yet another example of the “new normal” in the age of Obama, the idea that America just has to lower its expectations, that growth is no longer to be expected, and the country cannot expect better times ahead as it once did?
Follow Warner Todd Huston on Twitter @warnerthuston or email the author at firstname.lastname@example.org.