Have millennials finally caught up economically with previous generations?

Millennials, born between 1981 and 1996, have been doing better than expected recently. But they now need to take advantage of their improved economic prospects to build a financial cushion in a crisis and enough savings to finance calculated risks when opportunities arise.

Millennials have been called the “unluckiest generation” and the “lost generation.” They entered the workforce at a time of economic crisis, including the bursting of the housing bubble, the 2008-2009 recession, and a long period of stagnant wages. They faced record levels of student loan debt. Homeownership seemed out of reach for many.

It was widely believed that millennials would be the first generation to be worse off than their parents.

What a difference a few years can make.

A recent report by three researchers at Boston College’s Center for Retirement Research notes that “virtually all of the previous gap between millennials and previous cohorts in labor force participation, marriage, and homeownership has disappeared.”

The same story is playing out when it comes to wealth. In 2019, millennials ages 28 to 31 were significantly behind previous cohorts in terms of wealth accumulation. The Center for Retirement Research’s study, “Is the Retirement Picture for Millennials Looking Better?” notes that three years later, when this group was ages 31 to 41, millennials had pulled ahead of previous cohorts, largely due to a combination of homeownership and retirement savings plans.

Specifically, homeownership accounted for 63% of the increase in median net worth. The strength of the stock market also contributed to this increase, as nearly 60% of millennials own stocks (primarily in retirement accounts), a much larger share than the 48% of Gen Xers and 37% of baby boomers of the same age.