"WASHINGTON — Pearl Brady has a stable job with good benefits and holds two degrees, a bachelor’s and a master’s. But despite her best efforts, she has no savings, and worries that it will be years before she manages to start putting away money for a house, children and eventually retirement...
Because wealth compounds over long periods of time — a dollar saved 10 years ago is worth much more than a dollar saved today — young adults probably face less secure futures for decades down the road, and even shakier retirements.
“In this country, the expectation is that every generation does better than the previous generation,” said Caroline Ratcliffe, an author of the study. “This is no longer the case. This generation might have less.” The authors said the situation facing young Americans might be unprecedented.
A broad range of economic factors has conspired to suppress wealth-building for younger American workers; the trend predates the Great Recession. Younger Americans are facing stagnant pay — the median income, when adjusted for inflation, has declined since its 1999 peak — as well as a housing collapse and soaring student loan debt.
In interviews, a half-dozen young adults — men and women, with families and single, in a broad range of industries — described economic conditions that left them just barely keeping their heads above water...
Others said they had put their money into a home only to fall into foreclosure, or were struggling to pay for child care.
Strong and sustained job and wage growth would cure many of the ills facing younger workers, experts said. But their delayed or diminished wealth accumulation might still have a lasting impact on their finances.
“It’s a little bit of a tipping-point moment,” said Signe-Mary McKernan, an author of the study from the Urban Institute, a nonprofit Washington research institution. “If we don’t address it today, they might never catch up.”...
“I just don’t think about it,” said Mr. Ross, of his student loans. “I push the thoughts out of my mind, and when I do think about it now and then I kind of just think that maybe I’ll have to work indefinitely. And I hope I can find a career that will allow my body to do that.”...
With the wage and jobs picture bleak, and fixed pensions largely gone from the private sector, the answer to the conundrum of shoring up savings for younger workers might lie in new government policies, the Urban Institute scholars said. They suggested encouraging retirement accounts by making them automatic unless an employee opted out, or modifying the home mortgage interest deduction to push more money toward homeownership for lower-income workers.
For now, millions of younger workers are on their own. “We both had vanilla lower-middle-to-middle-class lifestyles,” said Christopher Greer, a 32-year-old who works in astronomy and lives in Arizona, referring to himself and his girlfriend. “I’m not sure how that’s going to play out for us.”"
The New York Times
Younger Generations Lag Parents in Wealth-Building