Retirement Prospects for the Millennials: What Is the Early Prognosis?

Johnson, Richard W.; Smith, Karen E.; Cosic, Damir; Wang, Claire Xiaozhi

doi:10.2139/ssrn.3079833

“…Johnson et al (2017) projects future retirement income for older Millennials and Generation Xers and finds that median income at age 70 for members of these groups will be higher than that of prior generations, though a smaller share of individuals will have enough to maintain their preretirement standard of living. These results, as the authors describe, are uncertain, given that today's young adults still have decades of work until their retirement.…”

mentioning

confidence: 99%

The Wealth of Generations, With Special Attention to the Millennials

Gale¹,

Gelfond²,

Fichtner³

et al. 2020

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We examine household wealth across birth cohorts and over time using data from the Survey of Consumer Finances. We show that although the Great Recession reduced wealth in every age group, longer-term trends indicate that the wealth of older age groups has increased while the wealth of younger age groups has declined. A substantial share of these changes, in both directions, can be explained by changes in household demographic and economic characteristics. As for the millennial generation, their median wealth in 2016 was lower than the wealth of any similarly aged cohort between 1989 and 2007. Millennials will have several advantages in wealth accumulation relative to previous generations, such as more education and longer working lives, but also several disadvantages, including weak prospects for economic growth and delays in home purchase and marriage. The millennial generation contains a significantly higher percentage of minorities than previous generations. We estimate that minority households have tended to accumulate less wealth than whites in the past, controlling for household characteristics, and the difference appears to be growing over time for Blacks relative to whites. These results apply to the period before the COVID-19 pandemic and are best interpreted as addressing generational wealth patterns through 2016 and providing a pre-COVID benchmark against which future studies can be compared.

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“…Putting together all of these factors is beyond the scope of this paper. However, Johnson et al (2017) projects future retirement income for older Millennials and Generation Xers and finds that median income at age 70 for members of these groups will be higher than that of prior generations, though a smaller share of individuals will have enough to maintain their pre-retirement standard of living. These results, as the authors describe, are uncertain, given that today's young adults still have decades of work until their retirement.…”

Section: Discussionmentioning

confidence: 99%

The Wealth of Generations, with Special Attention to the Millennials

Gale

¹

,

Gelfond

²

,

Fichtner

³

et al. 2020

SSRN Journal

2

0

View full text Add to dashboard Cite

We examine household wealth across birth cohorts and over time using data from the Survey of Consumer Finances. We show that although the Great Recession reduced wealth in every age group, longer-term trends indicate that the wealth of older age groups has increased while the wealth of younger age groups has declined. A substantial share of these changes, in both directions, can be explained by changes in household demographic and economic characteristics. As for the millennial generation, their median wealth in 2016 was lower than the wealth of any similarly aged cohort between 1989 and 2007. Millennials will have several advantages in wealth accumulation relative to previous generations, such as more education and longer working lives, but also several disadvantages, including weak prospects for economic growth and delays in home purchase and marriage. The millennial generation contains a significantly higher percentage of minorities than previous generations. We estimate that minority households have tended to accumulate less wealth than whites in the past, controlling for household characteristics, and the difference appears to be growing over time for Blacks relative to whites. These results apply to the period before the COVID-19 pandemic and are best interpreted as addressing generational wealth patterns through 2016 and providing a pre-COVID benchmark against which future studies can be compared.

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“…Baby -boom 1946-1964Gen X 1965-1980Millennial 1981-1996 Number While some research has found that pay and extrinsic rewards are important to Millennials in the labor market (e.g., Leveson & Joiner, 2014), Johnson et al (2018) find that pay is less important than other factors for Millennials in switching out of jobs in the non-profit sector; Smith (2010) reports that Millennials have said they are willing to give up higher pay for more vacation and/or more flexible work arrangements; and Calk and Patrick (2017) find that the most important characteristics of a job for Millennials are recognition, rewards for performance, and feeling part of the team. The sources of Millennials' job satisfaction are consistent with having been conditioned (by us, their parents) to focus on effort over achievement and being rewarded for participation over performance (see Ng & Johnson, 2015).…”

Section: Variablementioning

confidence: 99%

Millennials: Maligned or miscreants?

Hotchkiss

¹

2022

Southern Economic Journal

2

0

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This paper explores the degree to which labor supply behavior differs among Millennials, relative to earlier generations, especially to that of Baby-boomers. I find that wage and income elasticities are lower among Millennials, which can partly be attributed to trends beginning before their time. Responses to cyclical factors appear unchanged across generations. The overall lower observed labor supply among Millennials is nuanced with their behavior putting downward pressure on both hours and participation, whereas their characteristics are propping up labor supply. These differences could have important implications for economic growth and policy considerations.

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Retirement Prospects for the Millennials: What Is the Early Prognosis?

Cited by 10 publications

References 55 publications

The Wealth of Generations, With Special Attention to the Millennials

The Wealth of Generations, With Special Attention to the Millennials

The Wealth of Generations, with Special Attention to the Millennials

Millennials: Maligned or miscreants?

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