As baby boomers exit the workforce and fade into the sunset of retirement, millennials are increasingly taking their place, many of whom are in their early- to mid-30s. And while the parents of these 18- to 35-year-olds, no doubt, wish nothing but the best for them from a standpoint of earnings, new numbers reveal that millennials are making less than what their folks did when they were at the same age.
"Millennials are earning 20 percent less than what boomers made at the same age."
According to the U.S. Department of Labor, the median household income in the country is roughly $52,500. However, when confining households to millennials, the median is $40,581, CNBC reported, based on data published by the Federal Reserve and consumer advocacy group Young Invincibles. That's 20 percent less than what baby boomers earned during the equivalent stage of their lives. When including all age ranges, however, salaries have risen as of late, up nearly 3 percent in 2016 compared to 2015, according to figures maintained by Glassdoor.
Baby boomers, typically defined as those who were born in the years immediately following World War II, are appropriately named, given that for decades, they were the biggest generation in terms of population. They have since ceded that title to millennials, though, who now total approximately 83 million, according to government calculations, versus 75 million boomers.
Will hard work pay off? Many millennials uncertain
Understanding that higher pay often requires sacrifice, millennials appear willing to give to get, according to the results of a separate poll. Nearly 90 percent of 18- to 35-year-olds acknowledge that getting ahead in life requires discipline, the Economic Innovation Group reported, which commissioned the survey. At the same time, though, over 3 in 4 aren't so sure that their sacrifice will result in higher returns when all is said and done.
"Millennials are the future of the U.S. economy, and this survey helps answer the question of how businesses and policymakers can help this generation thrive," said Cathy Koch, tax policy leader for Ernst & Young, or what is now known as EY.
Almost 50 percent of workers aren't optimistic about their retirement prospects."
Retirement security on shaky ground
One area that businesses can help millennials succeed financially is by offering retirement benefits so that they can afford to exit the workforce in a financially stable situation. However, a number of millennials aren't entirely convinced that retirement is in the cards for them, believing that they won't be able to afford it. Roughly half of non-retirees - 47 percent - don't think that what they've saved will tide them over in retirement, according to a survey done early last year by Gallup. That's up substantially from 2012, when just 38 percent expected to retire in a financially tenable position.
Tom Allison, deputy policy and research director at Young Invincibles, told CNBC what millennials are encountering today may be a sign of what's to come, assuming nothing changes.
"The challenges that young adults face today could forecast the challenges that we see down the road," Allison explained.
Millennials are no longer the future of the American workforce; they're the here and now, and many businesses have individuals who fall into this generation and are indispensable to the company's function. Global Financial Distributors provides premium financing and insurance-backed lending strategies which can be used to fit the needs of a variety of financial considerations.
For more information on whether this strategy can suit the needs of retirement planning for your key employee assets - millennials or otherwise - please speak with a GFD Financial Services Manager.