Millennials – those born between 1981 and 1997 - recently surpassed Baby Boomers to become the largest generation in the country.[1] They also make up about a third of the U.S. labor force.[2] This makes millennials a huge part of the economy, a part worth knowing more about. To that end, here are five facts about millennials and their finances that are important to know.

1)    They don’t have a realistic view of retirement
According to a recent survey by the Center for Generational Kinetics, 70 percent of millennials expect to spend less than $36,000 a year in retirement.[3] But in 2013, the Bureau of Labor Statistics reported that average expenditures for people ages 65 to 74 – typical retirement age – were over $46,000 a year.[4] Millennials are also skeptical about how supportive a role Social Security will play in their retirement. Sixty-five percent believe that Social Security won’t provide them with “meaningful income” during retirement.[5]

2)    They are still damaged by the Recession
Entering the workforce during the Great Recession had immediate negative effects. In 2010, 13 percent of workers between ages 18 and 34 were unemployed.[6] Despite a historically large jump in employment after that year, millennials will suffer repercussions from the Recession for over a decade. Workers who start their career in a recession earn between 2.5 and 9 percent less every year than workers who start in a non-recession.[7]

3)    They have more student loan debt than any other generation
Student loan debt can put a serious strain on a worker’s finances, especially if she’s already dealing with limited earnings potential for the next 15 years. Each graduating class leaves college with a greater debt burden. The Class of 2015 had an average burden of $35,000, roughly $14,000 more than 2005 graduates.[8] The median net worth of young households is seven times greater for those without student loan debt - $64,700 compared with their indebted peers’ $8,700.[9] Student loan debt typically coincides with other large debts as well, like credit card or car loan debt.[10]

 Average debt per borrower

4)    Fewer millennials identify as middle class
In 2008, 53 percent of millennials self-identified as middle class.[11] By 2014, that number had fallen to 46 percent. In the same time, the share of millennials who identify themselves as lower or lower-middle class leapt from 25 to 46 percent.[12] These changing self-identifications indicate that millennials don’t feel as though they’re in a recovery…yet.

5)    They are the most financially optimistic generation today
Despite these harsh realities, millennials feel bullish about their financial future. While a relatively small share (32 percent) say they earn or have enough now to lead the kind of life they want, a whopping 53 percent say they will earn enough in the future.[13] That’s a total of 85 percent who are positive about their finances, either now or in years to come. Only 14 percent predict that they won’t ever earn enough, compared with 30 percent of Generation Xers and 38 percent of Baby Boomers.[14]



[1] Pew Research Center. (May 11 2015). “Millennials surpass Gen Xers as the largest generation in U.S. labor force.” Available at http://www.pewresearch.org/fact-tank/2015/05/11/millennials-surpass-gen-xers-as-the-largest-generation-in-u-s-labor-force/

[2] See note 1

[3] The Center for Generational Kinetics and the Insured Retirement Institute. (September 2015). Will Millennials Ever Be Able To Retire? Available at http://myirionline.org/docs/default-source/research/iri-cgk-study---millennial-retirement-research---digital.pdf?sfvrsn=2

[4] U.S. Bureau of Labor Statistics. (December 2015). Consumer Expenditure Survey. Available at http://www.bls.gov/opub/btn/volume-4/consumer-expenditures-vary-by-age.htm

[5] See note 3.  

[6] The White House Council of Economic Advisers. (October 2014). 15 Economic Facts About Millennials. Available at https://www.whitehouse.gov/sites/default/files/docs/millennials_report.pdf

[7] Oreopoulos, Philip, Till von Wachter, and Andrew Heisz. 2012. “Short- and Long-term Career Effects of Graduating in a Recession.” AEJ: Applied Economics, 4(1): 1-29.

[8] Sparshott, Jeffrey. (8 May 2015). “Congratulations, Class of 2015. You’re the most indebted ever (for now)”. Real Time Economics, The Wall Street Journal. Available at http://blogs.wsj.com/economics/2015/05/08/congratulations-class-of-2015-youre-the-most-indebted-ever-for-now/

[9] Pew Research Center. (15 May 2014). “Young adults, student debt, and economic well-being.” Available at http://www.pewsocialtrends.org/2014/05/14/young-adults-student-debt-and-economic-well-being/

[10] Thompson, Jeffrey and Gicheva, Dora. (February 2014). The Effects of Student Loans on Long-Term Household Financial Stability. Department of Economics, University of North Carolina at Greensboro. Available at http://bae.uncg.edu/assets/research/econwp/2014/14-02.pdf

[11] Pew Research Center. (March 7 2014). Millennials in Adulthood. Available at http://www.pewsocialtrends.org/2014/03/07/chapter-3-finances-social-trends-and-technology/

[12] See note 11

[13] Ibid

[14] Ibid