According to a recent study from the Urban Institute, younger generations may be worse off, now and in the future, than their parents before them. According to the study, which was examined in a recent New York Times article, “those in Gen X and Gen Y have accumulated less wealth than their parents did at that age over a quarter-century ago.”
The essential American dream is to climb the ladder and do better than the generation before. However, this generation might eventually do the opposite. The problem with delayed or decreased accumulation of wealth is two-fold: first, members of these generations are currently struggling to keep their heads above water. And second, having less wealth today means that these generations will have less time for their savings to compound—giving them less security in retirement decades from now.
The study, according to the article, pointed to several factors preventing younger Americans from saving and growing wealth. Among these factors were flat-lining wages, high unemployment, fewer job opportunities, and the collapse of the housing market causing young homeowners to be underwater in their mortgage. The median income has decreased since reaching its highest point in 1999. In addition, many of these Gen X and Gen Y-ers are struggling with large amounts of student loan debt, which can take decades to pay off.