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  • Writer's pictureDave Fullerton

Are Millennials Better or Worse off than Gen-X

It's a question that has been bouncing around for years - are millennials better or worse off than their predecessors, Generation X? This debate is often centred around economic wealth and prospects – given the tough economic climate many millennials are working in, it can be easy to think that they fare worse than Gen-Xers.


But what if we look deeper? Did Millennials start at a disadvantage, or were they more prepared to succeed as adults? Consider this post your chance to explore each generation's opportunities, challenges and outcomes.


Millennials: Higher After-Tax Household Incomes

According to a recent study, millennials had higher after-tax household incomes than young Gen-Xers. The median after-tax household income among individuals aged 25 to 34 was $66,500 in 2016, compared to $51,000 for young Gen-Xers in 1999.


This difference could be due to increased wages in specific industries, better career prospects, and a higher cost of living than the previous generation.


Millennials: Higher Assets and Net Worth

While it's true that millennials have higher after-tax household incomes than young Gen-Xers, they also carry more debt. The higher assets and net worth are primarily thanks to various factors such as home ownership, higher education, and low unemployment.


However, Millenials often choose to live in cities, like Vancouver or Toronto, according to a study conducted by Statistics Canada in 2021. This decision could result in more debt.


Generation X: Less Reliance on Debt

Millennials are relatively more indebted than the previous generation. The debt-to-after-tax income ratio was 216% for millennials in 2016 and 125% for young Gen-Xers in 1999. These debts stem from various factors, such as expensive education loans, inflated costs of living, and high insurance premium rates for their age group.


Generation X: Smaller Mortgages

Although millennials are entering the housing market at similar rates as previous generations, they are taking on larger mortgages to finance their home purchases. This trend could be attributed to expensive homeownership rates and higher interest rates on home loans. As a result, their mortgage payments become a more significant portion of their monthly expenses, leaving less money for other significant purchases.


Which is Better

Millennials have made strides with higher after-tax income, assets and net worth, but they also have more debt and greater mortgages. It is important to note that everyone's financial outlook varies depending on their age range, location, industry and income level. While millennials may face difficulty in the current economic landscape, they are making their mark regarding spending habits, investing choices and taking financial risks.


With some help, we can all take steps to achieve our desired goals, whatever our lot in life may be. We encourage you to reflect on your own today - understand how far you've come, and make sure you are preparing for your future.


Whatever challenges you may find yourself in, we can help! Contact us now to help you create more wealth.

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