They say you can't lose what you never had. And, when it comes to Generation Y and Generation X and its wealth, that saying might ring true. Experts are calling Generation X and Y the lost generations because they aren't as wealthier as their parents' generation. While some people blame the housing bubble, I think that's only part of the picture.
According to a recent article by Forbes, younger generations used to work hard and save more to become wealthier than their parents. I think that may have been true for the Greatest Generation, but the silent and baby boomer generations more likely inherited their wealth. I'm not saying the older generation today didn't work hard. But, most of the seniors that do have wealth probably would have been in debt if it weren't for their Depression-era parents leaving them an inheritance.
Losing financial ground
According to a study out of the Urban-Brookings Tax Policy Center, the net worth of people 47 and older is double that of people the same age 27 years ago. However, younger Gen Xers and older Gen Yers (ages 29 to 37) lost ground when compared to their peers from 1983. Their net worth went dropped 21 percent. Even though the net worth of people 47 and older is higher, they will need more money. Baby boomers may need more money if they live longer. With medical advancements, it's possible they will need much more money in retirement than their parents needed.
Gaining financial ground
Even though Generation Y and X may not have as much wealth right now, they don't need as much. I think the younger generations still have plenty of opportunities to live through great Bull stock markets when their retirement savings and investment accounts can double or triple in value. Generation X and Y are simply "late bloomers" when it comes to financial matters. I know I didn't start saving for retirement until I was 30. I didn't buy my first house until I was 31. And, even though I did buy my own home at the height of the housing bubble, I'll own my home outright by the time I'm 50.
Planning to be independent
Most of my Gen-X peers don't count on inheritances. They like the idea of being financially independent. Also, it's simply not realistic to plan on any kind of inheritance when it's obvious so many baby boomers are struggling with debt in their retirement. Most people from the younger generation are just relieved that it's not possible to inherit their parents' debt.
I am not as concerned about my finances because I know my children will help take care of me when I'm older. They enjoyed the multi-generational housing situation when we lived with different relatives to save money for our own home. My son's attitude about saving reminds me of my grandparents, who were part of the Greatest Generation. They care more about their family than they do about stockpiling money. And they want to live a debt-free life. Even though I still want to be independent when I'm retired, I know my children will provide a backup if times get bad. And, I have grown accustomed to living on less.
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