Jan 20, 2017 09:27 AM EST
Millennials Earn Much Lower Than Baby Boomers Did At The Same Age
A recent analysis has found that millennials are getting much lower salaries than baby boomers did when they were the same age. This comes even after the younger generation of workers are deemed as better educated.
USA Today College reported that a new analysis by the Young Invincibles, an advocacy group, revealed that millennials are earning 20 percent less than their parents when they were at the same stage of life. The group used data from the Federal Reserve for their study.
The analysis provides an in-depth look at the troubling generation gap. The data could also help explain the anxiety that surrounded the 2016 U.S. presidential election. It was noted that millennials only have half the net worth of the previous generation. Home ownership rate for the younger generation of workers is lower but their student is extremely higher.
The study compared millennials aged 25 to 34 years old in 2013, which is the most recent year available for the government's data, to the same age group for young adults in 1989. It came up with the figure after adjustment for inflation.
It was found that education did help slightly boost a millennial's income but not as much. The home ownership rate for the age group in the analysis dropped to 43 percent from 46 percent in 1989. The decline does not only affect millennials, though. Baby boomers who will soon be retiring should also be aware that these young professionals help finance the nation's Social Security and Medicare benefits.
This is why college students should learn how to manage their finances well. In today's modern world, it's best to do research on banking and how it can be maximized for your financial situation. Students should save for retirement as early as college since it would maximize compound interest. Just saving $25 each month to an account with 7 percent interest would earn an individual $59,890.53 after 40 years.
If you start saving early, it would eventually become a habit. This way, as soon as you enter the workforce, it would be easier for you to set aside a part of your income for your retirement nest egg.
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