Talking About My Generation: Comparing the Financial Wellness of Baby Boomers, Gen Xers and Millennials

In a recent discussion of environmental, social, and governance (ESG) investments with EBRI members, we considered how social concerns of prior generations of Americans in their twenties aligned with those of twenty-somethings today. Being a late Baby Boomer, I was dubious: The 1980s were the era of “Wall Street” and Gordon Gekko, after all — not social consciousness. Yet at the same time, early Baby Boomers who came of age in the 1960s and 1970s were of a different mindset still.

While we didn’t come to any definitive answer about social awareness across generations on the call, EBRI does have some definitive data on financial preparedness across generations. In a recent Issue Brief, EBRI used Survey of Consumer Finances (SCF) data to compare the financial wellbeing of Baby Boom, Generation X, and Millennial families of the same age. The findings were not encouraging.    

Overall, Generation X families were less likely to own a home or have any retirement plan than were Baby Boom families at the same ages. Further, the share of families having any retirement plan was lower among Generation X families than among Baby Boom families at the same ages across most race/ethnicity categories.

For Millennial families, things look even worse. According to the SCF data, homeownership rates are lower for Millennials than for Generation X families at the same ages. Further, the median net worth of Millennial families was lower than for Generation X families of the same ages, driven by the much lower net worth of those in the highest income quartile.

The one overriding financial indicator that was universally higher for the Millennial families compared with the Generation X families is not a good one: Millennials’ median debt levels are higher, led by substantially higher incidence and amounts of student loan debt. Further, Black and lower-income Millennials were particularly impacted by increased student loan debt. Black Millennials have also particularly experienced higher median debt-to-asset ratios compared with their Generation X peers as a result.

According to EBRI’s Employer Financial Wellbeing survey, employers are taking steps to understand the financial wellbeing needs of diverse workers, including surveying employees and holding focus groups. They are also adding diversity, equity, and inclusion efforts to their financial wellness strategy, such as offering communication and education materials in multiple languages (40 percent), ensuring that the look and feel of communications/solutions is diverse (39 percent), and ensuring that financial counselors or coaches are diverse in terms of race and ethnicity (36 percent). This latter effort dovetails with the fact that, according to the 2022 Retirement Confidence Survey, Hispanic and Black Americans are more likely to say that a connection or commonality between them and the advisor is important. This includes a preference for working with an advisor who has had a similar upbringing or similar life experiences to them, working with an advisor who is affiliated with their employer, working with an advisor who has a similar racial/ethnic background to them, and working with an advisor who is the same gender as them. Black and Hispanic workers were also more likely to say that one-onone, personalized education would be a valuable potential improvement to workplace retirement savings plans.

About ebriorg
President and CEO, EBRI

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