I read a stat the other day that got me thinking. The report from which I grabbed my nugget of information indicated that the Millennial cohort has roughly 3% of the total wealth in the US. It seemed like a small share of the total wealth, but I lacked context. Was this percentage of wealth normal given that Millennials are only just hitting their strides? Unfortunately, for my four older Millennial children (we have a Gen Zer, too) and the millions of others of a similar age, this percentage of wealth is exceptionally (and shockingly) small.

When Boomers were approximately the same age as Millennials are today, they owned nearly 7 times the wealth that Millennials possess. Not 7% more, but 7 TIMES with more than 21% of the total pie. In fact, the Silent Generations’ wealth was ONLY two times that of Boomers. Unfortunately for Millennials, their wealth accumulation has basically flat-lined.

No matter which generation we are referring to, wealth creation for those under 40 is a struggle, and Millennials are following this same pattern, and perhaps worse. What is particularly striking for me is how wealth creation has basically fallen off a cliff for those just hitting their 40’s (prime earning years?). As the following chart highlights, those aged 40-54 once averaged about 33% to 37% of the wealth at anytime up until about 2003. Today, their share of the pie has collapsed to just over 20%.

Poor wage growth, brought about by two major recessions, has conspired with significantly rising expenditures related to housing, college (student loans), healthcare, childcare, etc. to create the perfect storm. These realities are making it nearly impossible for this cohort to adequately fund their own retirement through a defined contribution plan. The long-term implications will be grave.

This generation has gotten a bad reputation because of their supposed spending habits (latte and avocado toast crowd), but so many things have conspired against them to create the current crisis. As the job market continues to transform, requiring workers to be more flexible responding to on-call/on-demand jobs, Millennials, and those generations that follow, will have a much more difficult time preparing for retirement, as they work to just keep meeting their basic needs.