Americans aged 30-40 are the ‘biggest losers’ in US society — here’s why

Recent data from Allianz highlights the difference between millennials and boomers from an economic standpoint.

It shows that, while boomers have been able to benefit from periods of strong economic growth, millennials have been hit with one financial crisis after another since reaching an age when it was finally possible to start saving and growing their wealth.

According to a study from the American Journal of Sociology, the average millennial has 30% less wealth at the age of 35 than boomers did at the same age.

Here’s how society’s “biggest losers” can get ahead after multiple setbacks.

Why millennials got a raw deal

Millennials have had a number of economic factors working against them over the years.

During the Great Recession, which lasted from 2007 to 2009, millennials — many of whom were in their 20s at the time — were impacted by high levels of unemployment, making it harder to not only build careers, but set aside savings and keep up with student loan payments.

With student debt, millennials weren’t helped by the fact that college costs rose exponentially in the years leading up to their postsecondary education.

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

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

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

Three years later, though, it was still at 7.8%. By contrast, boomers who entered the workforce in January 1970 enjoyed an unemployment rate of only 3.9%, according to the Federal Reserve.

Following the Great Recession, millennials found themselves trapped in a low interest rate environment.

Not only did the Federal Reserve's benchmark interest rate fall to record lows during that crisis, but it remained stagnant for more than five years afterward, making it harder for millennials to grow their savings.

Interest rates were far more conducive to savings during the 1970s, allowing boomers to build up cash reserves, data from the Federal Reserve shows.

Although the pandemic impacted people of all ages, millennials had been slowly digging themselves out of debt and furthering their careers when they once again found themselves plagued by rampant unemployment and sky-high inflation.

How millennials can get ahead

It’s not all doom and gloom for millennials. The good news is that, at this point, they’re likely further along in their careers, giving them an opportunity to boost their earnings and savings.

Even the eldest millennials today may still have another 20-25 years in the workforce, giving them an opportunity to ramp up IRA or 401(k) contributions and invest their money so they’re able to accumulate robust nest eggs in time for retirement.

Personal finance celebrity Suze Orman said there’s one simple way younger generations can grow their wealth.

“Their priority is their youth, their priority is time,” Orman told Moneywise last year. “If there's anything the younger generation needs to understand, it’s that the key ingredient to any financial freedom recipe is compounding.”