Young generations were badly hit in the recession, and it could have
widespread effects on their lives, from delaying homeownership to
starting a family and even retiring one day.
A new study from the Urban Institute shows that those under the age of
40 have accumulated less wealth than their parents did at the same age.
That coincides with a time when the average wealth of Americans has
doubled over the last quarter-century, according to the study.
“In this country, the expectation is that every generation does better
than the previous generation,” Caroline Ratcliffe, an author of the
study, told The New York Times. “This is no longer the case. This
generation might have less.”
Young adults are facing stagnant pay, a tough job market, soaring
student loan debt and some who did own a home may have faced lost equity
or even foreclosure during the housing crisis.
Will younger adults ever be able to catch up?
According to the Urban Institute study, if a person delays buying a home
to age 40 instead of age 30, that alone could result in a $42,000 loss
in home equity by the time that person reaches age 60.
Still, “strong and sustained job and wage growth would cure many of the
ills facing younger workers,” The New York Times reports. “But their
delayed or diminished wealth accumulation might still have a lasting
impact on their finances.”
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Source: “Younger Generations Lag Parents in Wealth-Building,” The New York Times (March 14, 2013)
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