Thanks to recession, millennials trail their boomer parents financially

When Julius Givens moved to Chicago after graduating from college in 2013, he spent six months delivering Potbelly sandwiches by bicycle while living with two other roommates in a studio apartment.

“I had no money” and more than $20,000 in student loans after earning a bachelor’s degree from the University of Missouri, said Givens, who aspired to be a firefighter at the time. “It’s tight living with three people in a studio, but you figure out how to handle it.”

Scrimping was a way of life for Givens, and it still is for some in his generation. Through a fluke in the timing of their births, 75 million young adults in the millennial generation entered adulthood as the economy was in or coming out of one of the worst recessions in U.S. history. And that’s left an indelible financial mark on today’s 25- to 34-year olds. Most have found jobs since the harsh days of unemployment, but their incomes are 20 percent lower than what baby boomers earned at the same age, according to a new study by Young Invincibles, an advocacy group for millennials. They also have half of the net wealth the baby boomer generation had accrued by roughly the same age.

The reason for the difference may not be entirely income. Millennials also tend to be making lifestyle choices that are different from their parents’ generation.

Lewis Minaglia, who is now 26, lived with his parents in the suburbs for 2½ years after graduating with a business degree from DePaul University. His goal was to save enough money to buy a home.

But once he’d accumulated enough for a small down payment, he decided he “wanted to be carefree.” He left his parents’ home in the suburbs at age 25 and moved to a Gold Coast one-bedroom apartment. Now he has the city life he craved while commuting to work, and no home or car payment will limit his choices if he decides to move for a job or a new neighborhood, he said.

Julius Givens, 26, also isn’t interested in the burden of owning a home or car. Buying a home seems antiquated for young adults now, he said. “This is not like the past, when you got married in your 20s, bought a house and worked at the same place for 30 years.”

“Do I want a family? Sure I do,” he added. “But a lot want to date around and live their life. I don’t see the rush.”

In past generations, marrying and having children has been a driver behind buying homes and other household assets. But the nation’s marriage rate has been declining, especially among the youngest adults, according to census data and the Pew Research Center. In 1960, 82 percent of 25- to 34-year-olds were married. But in 2010, only 44 percent of 25- to 34-year-olds were married.

The group with the highest proportion of married people — 62 percent — is now those aged 35 to 44, according to Pew. But even in that middle-aged group, marriage is down compared with past decades. It had been 86 percent married in 1960.

While millennials generally are behind their parents’ generation in building up wealth, the one area where they have more than young baby boomers is retirement savings. But Allison said he thinks that’s simply a result of changes in the workplace. Baby boomers often had pensions from employers, rather than the 401(k) savings plans that have taken their place in the workforce. Now employers often remove money automatically from paychecks and deposit them in 401(k) accounts for each employee, forcing individuals to get an earlier start on retirement saving.

Few people save for retirement on their own if they don’t have 401(k) plans at work, according to the Employee Benefits Research Institute, which has raised concerns about these young people eventually arriving at retirement with deficient savings.

Givens is among those with little saved. “I don’t need to save now. I’m not someone in their 50s, investing so I can go on vacations all over the world.”

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Twitter @gailmarksjarvis

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