Americans in their 30s and 40s are the “biggest losers” in American society – here’s why

A quick Google search shows that millennials are often labeled as entitled whiners who are quick to complain about their financial problems – but that’s not a fair assessment.

There’s a reason why millennials – typically defined as people between the ages of 28 and 43 – find themselves in a more difficult financial situation compared to previous generations.

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Last data Allianz highlights the difference between millennials and boomers from an economic point of view.

It shows that while baby boomers may have benefited from periods of strong economic growth, millennials have experienced successive financial crises since they reached the age of strong economic growth. At last the opportunity to start saving and increasing your wealth.

According to A test the American Journal of Sociology shows that the average millennial at age 35 has 30% less wealth than boomers at the same age.

This is how society’s “biggest losers” can come out on top after multiple failures.

Why millennials got a raw deal

Over the years, millennials have had many economic factors working against them.

During the Great Recession, which lasted from 2007 to 2009, millennials – many of whom were in their 20s at the time – experienced high levels of unemployment, making it difficult not only to build a career, but also to save and keep up with work. student loan repayment.

In the case of student debt, millennials were not helped by the fact that college costs rose exponentially in the years leading up to their post-secondary education.

Education Data Initiative reports that the average annual cost of a public four-year institution was $514 in 1973-1974, when many boomers attended.

However, in the 2003–2004 academic year, when many millennials attended, the cost increased to $4,587. This left millennials with high levels of student debt, struggling economically, and a slow economic recovery that would ultimately take years.

In October 2009, the national unemployment rate reached 10%, According to Bureau of Labor Statistics.

However, three years later, the percentage was still 7.8%. In contrast, boomers who entered the workforce in January 1970 had an unemployment rate of just 3.9%. According to Federal Reserve.

After the Great Recession, millennials found themselves trapped in low interest rates.

During the crisis, the Federal Reserve’s benchmark interest rate not only fell to a record low, but it also remained unchanged for more than five years afterward, making it difficult for millennials to increase their savings.

In the 1970s, interest rates became much more supportive of saving, allowing baby boomers to accumulate cash reserves, data from Federal Reserve programs.

While the pandemic has impacted people of all ages, millennials have been slow to dig out of debt and advance their careers as they are once again plagued by rampant unemployment and sky-high inflation.

Read more: The cost of living in America continues to spiral out of control – use these 3 “real assets” to protect your wealth today, regardless of what the US Fed does or says

How millennials can get ahead

It’s not all doom and gloom for millennials. The good news is that at this stage they are likely further along in their career, which gives them the opportunity to increase their earnings and savings.

Even the oldest millennials today may still have another 20-25 years on the labor market, which will give them a chance to develop IRA Or 401(k) contributions and invest their money to be able to reliably accumulate funds nest eggs just in time for retirement.

Personal finance star Suze Orman said there is one simple way younger generations can grow their wealth.

“Their priority is youth, their priority is time” – Orman he said Last year financially. “If there is one thing that the younger generation needs to understand, it is that this is a key ingredient in any recipe for financial freedom mixing“

For example, if you start saving $100 every month at age 35 — at an average annual rate of return of 12% — you’ll have $300,000 by age 65, Orman explained.

While this is significantly less than the estimated $1.46 million Americans need to save to retire comfortably, According to Northwestern Mutual is still a significant chunk of money that could help millennials make up for time lost during the financial crises they experienced.

Another way American millennials can make up for lost time is through real estate. This powerful tool can be used whether you own a home or decide to invest in one real estate investment funds (REITs).

The latter is a popular investment tool that is an alternative to direct purchase of real estate. It is beginner-friendly because you can invest in REITs with small amounts of money.

Even though millennials have had a difficult economic life, their situation is not completely hopeless. If economic conditions turn in their favor, they will have a golden opportunity to make the most of the next few decades in the workforce.

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This article is for informational purposes only and should not be considered as advice. It is provided without any warranty.