By Earlene Greene
- Baby Boomers control 53% of the U.S. wealth vs. millennials 4.6%
- In 2064, the average white family likely will possess $2.7M in wealth vs. $789K for the average Black family
Millennials are set to become the largest generation and portion of the workforce in the U.S. though they continue to lag behind Baby Boomers when it comes to creating generational wealth. People 57 to 75 years old, control 53% of the country’s total wealth, and have a far larger share of the country’s wealth than millennials when they were the same age, 21% compared to the millennials’ 4.6%. Building generational wealth, financial assets passed down from one generation to another, is an uphill battle for millennials, particularly Black millennials whose financial legacy is imperative in closing the racial wealth gap.
Why This Matters: Millennials, on average, are worse off financially than their parents and grandparents. The median annual wage for Black workers is about 30% lower than that of white workers, and 3.5 million Black households have a negative net worth due to debt, according to a McKinsey & Company report. Oftentimes, the issue with savings and wealth building is low income. In 2064, the average white family will likely possess $2,782,727 in wealth while the average Black family wealth will be $789,164, according to a report by Elliott and Abacus Wealth Partners, that’s an astonishing 70% disparity.
African American millennials are being shut out of generational wealth building as they tackle rising rent costs and home prices, disproportionate student loan debt, coronavirus economic inequities, and on average, getting married later in life, causing them to delay homeownership and wealth building capabilities. According to a 2018 study from financial services company Legal & General, they found 43% of people under 35 received help from parents or family members when purchasing a home.
According to Angie O’Leary, head of wealth planning at RBC Wealth Management, Baby Boomers are in a sound enough financial position to pass down their wealth to their children, because they have a significant amount of money in retirement plans, invested heavily in the stock market over the past 30 to 35 years, and bought bigger homes with greater value.
Situational Awareness: Black millennials are more educated, innovative, and capable of building wealth. A journey of a thousand miles begins with one step, setting priorities, starting a savings plan, purchasing a home and other income producing real estate, and even investing in the stock market, or becoming an entrepreneur are all great places to begin. Building wealth is a responsibility we have toward our future generations, and is the foundation for lucrative opportunities, access to better education, health, careers and building up our community.
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