THE ECONOMIC BLUEPRINT: Millennials and their money: Compounding challenges


I am a proud millennial. No, I don't have an ironic handlebar mustache and I'm not working on an Uber for cat grooming. I am a millennial because I was born in the mid-1980s and I remember a time before the Internet, but I don't remember life without cable TV.

I'm also a millennial because I entered the workforce during the worst economy since the Great Depression. Pensions occupy the same space in my mind as rotary phones ("let's see if these youngins' know how to use them").

Us millennials are coming of age in some of the most polarizing times. Politically polarizing, but also polarizing insofar as everything is viewed in the extreme. We have been extremely blessed in the technologies we've benefited from and could never have imagined in our youth. But we're also extremely concerned about our nation's economic infrastructure which seems to be crumbling right in front of our eyes.

The challenges facing millennials

In financial terms, it is not easy being a millennial. We have accumulated less wealth than most prior generations at the same age, about 25% less than the preceding Generation X.1

Possibly the most impactful reason for decreased wealth is the exponential growth of student loan debt. The amount of student loans taken out increased by approximately 460% between 1990-91 and 2012-13, and that's even adjusted for inflation!2 There is now $1.6 trillion in outstanding student debt,3 second only to mortgages as a category of debt.

Compounding the negative effect of less wealth accumulation, we also cannot rely upon the defined benefit plans provided to older generations. As of 1980, 60% of private sector workers had defined benefit programs only (i.e., pensions) and 17% had defined contribution only (401k, IRA, etc.).4 By 2006 the statistics had completely reversed: 10% of private sector workers had defined benefit only and 66% had defined contribution only.5

The government will not rescue millennials

Because of the disappearance of pensions, we are truly on our own financially. What's more, we cannot rely on the government to protect us. Retirees know there is a social welfare system that will support them. Our generation knows with near certainty that Social Security and Medicare will not provide the same level of benefits for us. We just hope there is something there at all.

According to the Congressional Research Service, "the 2019 Medicare Trustees Report projects that, under intermediate assumptions, [Medicare Part A] will become insolvent in 2026."6

Social Security is not doing much better. The official government report earlier this year stated that Social Security will exceed its income in 2020 for the first time since 1982.7 Moreover, "the program's reserve fund is projected to be depleted in 16 years, at which time recipients will get smaller payments than they are scheduled to receive if Congress does not act."8

Is there hope for millennials?

Short answer: yes, but it will require thoughtful planning.

Certainly, it feels as though the deck is stacked against our generation and we will have to overcome challenges that prior generations never had. Thankfully, time is on our side and if we acknowledge the problems, sooner rather than later, we can make the right preparations. And for that, stay tuned for the next installment of The Economic Blueprint.



1William G. Gale, Are the kids alright? Saving and wealth accumulation among the millennial generation, The Brookings Institute, 20/are-the-kids-alright-saving-and-wealth-accumulation-among-the-millennial-generation/, published Mar. 20, 2019.

2Richard Fry, The Growth in Student Debt, Pew Research Center, https://www.pewsocial, published Oct. 7, 2014.

3Teddy Nykiel, 2019 Student Loan Debt Statistics, https://, published Sep. 20, 2019.

4Catherine Rampell, Pensions, 1980 vs. Today, The New York Times, https://economix. Sep. 3, 2009.


6Medicare: Insolvency Projections, Congressional Research Service, misc/RS20946.pdf, updated July 3, 2019.

7Alan Rappeport, Social Security and Medicare Funds Face Insolvency, Report Finds, The New York Times, https://, Apr. 22, 2019.



Attorney Kyle Zwiren works with Financial Architects Inc., an independently-owned company located in Farmington Hills. Zwiren and his team serve attorneys and other professionals to help them design financial plans in line with their goals and based on optimal efficiency. He practiced law prior to becoming a Financial Architect and left the practice to follow his passion. To talk to Zwiren about other topics featured in The Economic Blueprint, email him at or call him at 248-482-3622.

Published: Fri, Nov 22, 2019