This time around, baby boomers and millennials appear to be on the same side—at least the middle class. Although there are many differences between the two generations, there is a surprisingly strong overlap in the generational Venn diagram. (This might make sense when you consider that, by and large, baby boomers raised millennials, but that’s another story.)
The striking similarity lies in a new report It comes from H&R Block, which analyzed data on 10.5 million Americans who filed taxes with the company since 2000 as well as surveys of more than 1,000 taxpayers. Nearly half of these taxpayers (4.6 million people) have an adjusted gross income between $45,000 and $145,000, which H&R Block considers middle-income. While this includes everyone of all ages, the highest average ages are 32 and 62 for Millennials and Baby Boomers respectively.
Of course, these numbers make sense, as Millennials and Baby Boomers are the largest generations, while Generations X and Z are much smaller. It stands to reason that the greatest number of middle-class Americans would respond. But even so, they have more in common than you might think.
Many middle-class Americans are not married or no longer married. While the share of Millennials (43%) is lower than that of Baby Boomers (50%), the gap isn’t that big. This data is in some ways unsurprising, given that Millennials tend to marry later or not at all, and that marriage tends to elevate people’s status and status. middle class common. They also like to live in coastal states like North Carolina, Texas, and Florida. But no matter how surprising, one of their biggest overlaps is their views on money.
‘A very real fear’ of money
“We found that Millennials and Baby Boomers, who make up the majority of middle-income Americans, have very different views on the world,” said Kathy Pickering, chief tax officer at H&R Block. wealth. “The common thread we see among them is how they feel about income and the cost of living. Concern about inflation and how it continues to affect income growth is a real concern for Millennials and Baby Boomers.”
Most of these households have incomes below $80,000 (the median U.S. household income is $70,784), and although their incomes have grown beyond expected growth projections, they are still worried about the impact of inflation on their paychecks. Only half of middle-class Millennials are satisfied with salary growth, while 65% of middle-class Baby Boomers are dissatisfied. Nearly half (42%) of baby boomers also believe their financial situation is worse this year than last year.
Just trying to get by
But these generations respond to money worries differently, consistent with their life stages. Millennials are the most likely to feel financially insecure, which makes sense given the many financial challenges they face and the fact that they are about to enter their high-spending years.
This explains why many people also say they work two jobs to make ends meet. Young people are more vulnerable to economic fluctuations and therefore more likely than older generations to turn to gig work. A Bankrate survey found that two in five adults in the United States work part-time.According to Deloitte, these additional revenue streams are designed to help address their biggest concern – the cost of living, but Bank of America new report It was found that these side hustles still did not give young people enough money to make ends meet.
Meanwhile, baby boomers are also busy, although not as much. While H&R Block’s survey shows that 44% of people are retired, 38% are still working full-time, and some have part-time jobs or side hustles. One interviewee noted that they “work overtime to make more money.”
This is not surprising considering that $1 million is no longer enough to retire comfortably. As we live longer and the cost to the economy increases, many people will end up working longer hours or returning to work. labor force for more money. Baby boomers don’t seem to be leaving the office anytime soon. A Bain & Company report found that older workers will make up more than a quarter of the global workforce by 2031, 10% more than in 2011.
cost of living crisis
H&R Block found that middle-income baby boomers are also focused on postponing large purchases, preferring to save, invest or pay down debt. Most people have at least the security of homeownership, while Millennials are the most likely to report to H&R Block that they are still renting.
Even millennial millionaires rent because the cost of living in cities is so high.No wonder a generation increasingly It feels like they will never become homeowners. (Although this may be change slowly—The number of millennials who own homes finally outnumbers those who rent. )
Ultimately, 62% of Millennials are extremely worried about inflation and 70% of Baby Boomers expect inflation to continue to rise, according to H&R Block. Even though inflation technically makes the middle class wealthier, it doesn’t stop families from feeling the pinch amid tight housing and job markets. After saving unprecedented amounts early in the pandemic, the middle class has fallen from those heights.
Still, middle-class Millennials remain hopeful – they are the most likely to believe their income will increase next year at 67%. Middle-class baby boomers are less optimistic, with 66% believing their financial situation will remain the same or get worse. It’s an interesting dichotomy, considering how often Millennials are harmed by the economic stick.
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