Fed Study Asks "Are Millennials the Lost Generation?"

I previously called millennials the "screwed" generation. A more polite Fed study uses the term "lost generation".

A Fed study on the Demographics of Wealth explains How Education, Race, Birth Year Shaped Financial Outcomes.

The study covers the long last-lasting wealth impacts of the Great Recession on young families. The article's first subtitle reads "Lost Generation?" but the charts show it's more like "Lost Generation!".

The study did not break down the results using names of generations. Here are the ones I used in anecdotes on the Fed research charts.

These charts caught my eye, as related to millennials, from the Fed study.

Change in Median Income

Wealth vs. Predicted Wealth

Change in Wealth Levels

Conclusion

The study concludes: "It is far too soon to know whether families headed by someone born in the 1980s will become members of a lost generation for wealth accumulation. To be sure, there are grounds for optimism. Yet there are reasons to be very concerned about the financial outlook for many young Americans."

Odds are another recession is on the way. It will not be put off forever. Millennials who went deep into debt to buy a house will likely find themselves underwater.

The stock market is insanely overvalued.

What about education debt? Healthcare? Pensions?

Millennials who already overpay for healthcare will be under increasing pressure to pay more into the system as costs soar out of hand.

Millennials stand to get screwed on absurd pension promises made to their parents.

Inheritance

One potential saving grace is boomers will die and millennials will inherit their parents wealth. But that wealth most likely will have to be split among many siblings. And many boomers will die broke. Thus inheritance will be be very skewed. The median inheritance is likely to be a pittance.

Screwed Generation

There are plenty of reasons to think a major political upheaval is coming. If so, will the result be any good?

Mike "Mish" Shedlock

Comments
No. 1-25
Snow_Dog
Snow_Dog
Blacklisted
Blacklisted said: Unless one plans on dying in the next 10-15 years, most everyone will be severely impacted by the coming sovereign debt crisis, which will have a devastating impact on the treasury IOU's in social security, and the govt bonds in pension plans. Those believing that stocks will crash will also get crushed when they run for cover in govt bonds. Those that own stocks in "street name" or hide their gold in safety deposit boxes will also have their beliefs shattered when govt comes calling for what they "need" to save the country. Look at the fine print on your safety deposit box. You are only allowed to keep documents, not cash or gold, which can now be confiscated since govt considers it money laundering to hide money from the government. Also, look at your bank statements where it makes it very clear you are a lender to the bank and thus required to do your due diligence when loaning money. No, you won’t get a bail-out, but a bail-in, and FDIC insurance will be meaningless in a systemic crisis. Buyer beware. And if you think the massive amount of wealth parked in IRA’s and 401k’s will be safe, think again. Govt / Socialism is collapsing under its own weight, and govt’s will act like a cornered rabid dog, as they attempt to hold on to their perks and power. As demand for govt debt collapses, they may give you the option of taking treasuries in exchange for your stocks as a token appreciation for your contribution in saving Amerika. Why do you think they want to confiscate guns so badly? Stocks in "your name" will continue to be the safe-haven until the end of the public to private transition in 10-15 years.

It sounds like you’re describing a private-to-public transitioning. There will be no private property to be had once the concept itself becomes illegal.

10-15 years? I’m gloomy, but not to that extent. Twenty five more years for the US, but EU will be done in 10-15.

Blacklisted
Blacklisted

Unless one plans on dying in the next 10-15 years, most everyone will be severely impacted by the coming sovereign debt crisis, which will have a devastating impact on the treasury IOU's in social security, and the govt bonds in pension plans. Those believing that stocks will crash will also get crushed when they run for cover in govt bonds. Those that own stocks in "street name" or hide their gold in safety deposit boxes will also have their beliefs shattered when govt comes calling for what they "need" to save the country. Look at the fine print on your safety deposit box. You are only allowed to keep documents, not cash or gold, which can now be confiscated since govt considers it money laundering to hide money from the government. Also, look at your bank statements where it makes it very clear you are a lender to the bank and thus required to do your due diligence when loaning money. No, you won’t get a bail-out, but a bail-in, and FDIC insurance will be meaningless in a systemic crisis. Buyer beware.

And if you think the massive amount of wealth parked in IRA’s and 401k’s will be safe, think again. Govt / Socialism is collapsing under its own weight, and govt’s will act like a cornered rabid dog, as they attempt to hold on to their perks and power. As demand for govt debt collapses, they may give you the option of taking treasuries in exchange for your stocks as a token appreciation for your contribution in saving Amerika. Why do you think they want to confiscate guns so badly? Stocks in "your name" will continue to be the safe-haven until the end of the public to private transition in 10-15 years.

Liki_Weaks
Liki_Weaks

Painting the Boomers as self absorbed, spoiled rich folk, who ruined the world is a pretty inaccurate stereotype, albeit, one that bitter 'don't haves' use frequently. However, as a Boomer, I do believe that the advent of high housing prices, medical costs and student loans is creating a generation that will be poorer and less able to achieve the lifestyle of the Boomers in the future. Perhaps it's silly, but I blame the politicians, bankers and boardrooms for only focusing on the short game while knowing full well that there would be grave generational consequences. I don't really see it as a generational thing, politicians, bankers, and management come in all generations. No one generation has the corner on being selfish and self-absorbed. Of course, it takes time to get to positions of power so it appears to be a 'generation' issue--- I'm doubtful the Millenials will do any better and I suspect that's also why we see the trend toward socialist ideals. They're just out to 'take' what they didn't get handed to them already. Such an approach is not any more nobler than the Boomer approach...

Liki_Weaks
Liki_Weaks

Probably better to endure the buffoons but there are some who go over the bounds....

Happy Bliss
Happy Bliss

It is primarily consumption based. Boomers don't want to lower their standard of living materially by being more efficient and sharing with the future generations, which is extreme negligence. The other extreme manifests to balance things out, which is younger generations not wanting to be a part of the consumer culture. Therefore, they don't buy things, and don't want to participate when rent is more than 2 weeks pay. So they develop the alternative, which is the tiny house lifestyle metaphorically.
Boomers don't know what to do with Leisure, preferring to gluttonize and party rather than develop consciously. Younger folks get lots of Leisure time with the internet to learn to be more efficient and sustainable culturally. The new arrangement actually works for both generations. Unless they start fighting.

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