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January 02, 2018 at 07:00 PM
In October, the Federal Reserve released the 2016 Survey of Consumer Finances or SCF. The SCF is one of the largest (over 6,000 households were interviewed for the 2016 survey) comprehensive and representative surveys to track patterns of household spending, income, wealth and investment.
Conducted every three years since 1989, the SCF provides analysts — including demographics geeks like my team and me — a treasure trove of information. You might have already seen news stories documenting things like educational and geographic differences in income.
One of the big questions being asked this time around is whether household wealth has recovered to its pre-Great Recession levels. That’s an important question, but we’re (of course) interested in asking that question from a generational perspective. And the answer is … good and bad.
The good news is that median household net worth for millennial, Gen X and boomer households has increased since it was last measured in the 2013 SCF. (We use the median instead of the mean, because the mean is inflated by the relatively high net worth of high-income households; the median is a better measure of what is typical when there are some households with much higher, or lower, incomes than the rest of the sample.)
Overall, net worth has increased by around 16% in that time. But perhaps even more interesting is that it has increased the most for Gen X households, by close to 70%. Maybe there is hope for them in terms of planning for a “normal” retirement.
Gen Xers, as many readers are aware, are experiencing the most expensive years of their lives right now. Besides trying to find money to save for a “normal” retirement, most Gen Xers have children that are a big expense day to day, mortgages, college savings accounts to try to fill, or college tuitions they’re trying to pay.
Many Xers are also still dealing with some sort of student debt. The expenses keep rolling in and the income is struggling to keep up. My daughter, for example, qualified for her volleyball club’s national travel team. It was a great achievement. My wife and I celebrated with her while exchanging glances that conveyed the same thought — we’ll have to find a way to afford it.
But the bad news, at least for Gen X households, is that they also lost the most over the course of the Great Recession. Their household net worth fell by close to 40% from 2007 to 2010. So, they had a deeper hole to climb out of than did the baby boomers. And it gets a bit worse for them.
