Ben Steverman, Bloomberg:
Our capacity to fetishize youth never ceases to amaze. But while older Americans definitely want to look like younger folks, they certainly don’t want their finances. That’s because the wealth gap between generations keeps widening, and their children’s future is beginning to look ugly.
Just two years ago, the median American born in the 1980s—the cradle of millennials—had family wealth that was 34 percent below what earlier generations held at the same age, the Federal Reserve Bank of St. Louis reported last month. And all the data show it’s probably going to get worse.
As affluent baby boomers thank years of soaring markets for their paid-off mortgages and plump portfolios, millennials and the next cohort, Generation Z, are weighed down by student debt and stagnant wages. They can only contribute the bare minimum to their retirement plans and struggle to find affordable homes within commuting distance of their jobs.
By 2034, Social Security won’t be able to pay out full benefits, the program’s trustees estimated this month. Any solution that would rectify its finances will probably require more taxes and more benefit cuts—all coming out of the pockets of younger workers. Boomers, who are exiting the workforce in droves, will already be comfortably seated when the music stops, or out of the picture.
Alicia Munnell, the director of Boston College’s Center for Retirement Research, recently lamented that government inaction on Social Security means “that most baby boomers have escaped completely from contributing to a solution.” This month, she offered some depressing advice to younger Americans about what they can do to make up the difference: Work longer.
The reaction to her earnest advice was rage.