Figure 3 Figure 1 Comparison of Generation X and Millennials' Student Loan Incidence Conclusion Comparison of Generation X and Millennials' Ownership of Any Retirement Plan When They Were Ages 25 –36, by Race/Ethnicity of the Family Head 60% or Defined Contribution Plan When They Were Ages 25 –36, by Race/Ethnicity Black Millennial families are clearly struggling to build wealth — and are even lagging behind the relatively 80% Generation X Millennials lower levels of financial preparedness of the generation preceding them. As the 2021 Retirement Confidence 50.3% Generation X Millennials January 20, 2022, #421 4 50% 69.6% Survey (RCS) showed, Black Americans have different attitudes and experiences with the financial system. 70% 44.9% 64.0% A nother important finding from the RCS is that Black Americans are more likely to look to their employer for 60.2% help with their finances. Consequently, employers are in a position to help reduce this financial disparity by 38.6% 40 60% % 56.9% i ncorporating programs within their retirement plans and financial wellness initiatives that could specifically 53.1% Black Families’ Financial Statuses Show Signs of Decline 49.2% address the needs of their Black workers. 50% 46.3% 45.8% 45.6% 30% 45.2% 27.1% Across Generations 25.3% 24.1% 23.4% The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute based in 40% 35.6% 35.6%35.5% 18.9% Wa shington, DC, that focuses on health, savings, retirement, and economic security issues. EBRI does not lobby 20% In a recent Employee Benefit Research Institute (EBRI) study comparing the financial indicators of Generation X 31.4% and does not take policy po 1 sitions. The work of EBRI is m 2 ade possible by funding from its members and 30% 27.4% and Millennial families with family heads ages 25–36, one trend stood out: Black Millennial families were sponsors, which include a broad range of public, private, for-profit and nonprofit organizations. For more 3 falling behind relative to their Generation X counterparts. Comparing the two generational cohorts using the 21.4% 10% i nformation go to www.ebri.org or connect with us on Twitter or LinkedIn. 20% Federal Reserve’s Survey of Consumer Finances data shows that relative to Black Gen X families, Black Millennial families of the same ages have: 0% 10% White, non-Hispanic Black/African American Hispanic Other Lower Retirement Plan Incidence — Black Millennial families had lower incidences of both any retirement Source: Employee Benefit Research Institute estimates of the 2001 and 2019 Survey of Consumer Finances. 0% plan ownership and defined contribution (DC) plan ownership in 2019 compared with their Generation X Any Retirement Defined Any Retirement Defined Any Retirement Defined Any Retirement Defined counterparts in 2001 (Figure 1). Sixty percent of the Black Generation X families had any retirement plan in 2001 Plan Contribution Plan Plan Contribution Plan Plan Contribution Plan Plan Contribution Plan vs. 46.3 percent of the Black Millennial families in 2019. DC plan ownership among Black Millennial families White, non-Hispanic Black/African American Hispanic Other was also lower. In contrast, Hispanic Millennial families had an improvement in their DC plan ownership rate Source: Employee Benefit Research Institute estimates of the 2001 and 2019 Survey of Consumer Finances. L ower Net Worth — The truly staggering financial indicator was how low the median net worth (assets minus relative to their Generation X counterparts — although their retirement plan ownership rate in 2019 was still debts) of the Black Millennial families was in 2019 — $1,790 (Figure 4). This means that half of these families lower than that of Black Millennial families. had a net worth below that amount, which would be a level that wouldn’t allow a family to have any flexibility in their finances. Furthermore, this was substantially lower than that of their Generation X counterparts in 2001, Lower Homeownership — Homeownership was lower overall among Millennial families vs. Generation X Figure 2 w hich was $14,201 in 2019 dollars. The Black Millennial families’ net worth was also markedly below the net families (Figure 2). However, the ownership rates were only marginally lower for Millennial families of each Comparison of Generation X and Millennials' Homeownership w orths of the families of the remaining races/ethnicities, such as Hispanic Millennial families, whose net worth race/ethnicity — except Black Millennial families. Indeed, the rate of homeownership for Black Millennial When They Were Ages 25 –36, by Race/Ethnicity w as the next lowest at $15,000. 60% families was half that of the Black Generation X families — at 21.9 percent and 43.2 percent, respectively. 56.3% 56.2% Generation X Millennials Furthermore, Black Millennial families’ homeownership rate was at best two-thirds of the ownership rates among the remaining Millennial families. Figure 4 50% Comparison of Generation X and Millennials' Median Net Worth Higher Student Loan Debt Incidence — The incidence of student loan debt was higher for all Millennial 43.2% When They Were Ages 25 –36, by Race/Ethnicity of the Family Head families than for their Generation X counterparts (Figure 3). The Black and White Millenni 40.6% al families’ student $60,000 39.1% $56,320 40% Generation X Millennials loan debt incidences were roughly 85 percent higher than those of their Generation X counterparts. However, the 35.6% 34.2% proportion of Black Millennial families having student debt was still nearly 6 percentage points higher than White $50,000 $46,495 Millennial families (50.3 percent vs. 44.9 percent, respectively). 30% $39,925 $40,000 21.9% 20% $30,000 1 Copeland, Craig, “Comparing the Financial Wellbeing of Baby Boom, Generation X, and Millennial Families: How Do the $20,000 $17,590 Generations Stack Up?,” EBRI Issue Brief, no. 548 (December 16, 2021). 10% $15,000 $14,021 2 $13,357 Baby Boom, Generation X, and Millennial families are defined to mean families with heads of the ages falling into the birth years that define each generation. The spouses could be of a different generation, but for the purposes of the study, the $10,000 4 See Copeland, Craig, and Lisa Greenwald, “2021 Retirement Confidence Survey: A Closer Look at Black and Hispanic families’ categories are determined by the age of the family head. 0% $1,790 3 Am ericans,” EBRI Issue Brief, no. 530 (Employee Benefit Research Institute, June 10, 2021). For the race/ethnicity categories, the Survey of Consumer Finances (SCF) has respondents self-identify into the following White, non-Hispanic Black/African American Hispanic Other $0 categories — White, non-Hispanic; Black/African American, non-Hispanic; Hispanic; and other, which consists of those White, non-Hispanic Black/African American Hispanic Other Source: Employee Benefit Research Institute estimates of the 2001 and 2019 Survey of Consumer Finances. races/ethnicities not defined in the three prior categories, such as Asian Americans and those who identify as multiracial. Source: Employee Benefit Research Institute estimates of the 2001 and 2019 Survey of Consumer Finances. Again, SCF is at the family level, so the characteristics of the family head (or the reference person) are used to categorize the ### families. Thus, a White Generation X family is a family with a family head born from 1965–1980 who is White, non- Hispanic. The remaining families are defined accordingly. EBRI’s on Twitter! @EBRI or http://twitter.com/EBRI EBRI blog: https://ebriorg.wordpress.com/ © 2022, Employee Benefit E E E Re B B BR R Rse I I I on on on arc T T Th witt witt witt In e e estit r r r: : : @ @ @u E E Ete, B B BR R RI I I9 o o o 0r r r1 htt htt htt D S p:/ p:/ p://t /t /tt wit wit wit . S ter ter ter W ...c c c,om/ om/ om/ SuE E E it B B Be R R R 8 I I I 0 2 , B B B Was log: log: log: htt htt htt hin ps ps psg :/ :/ :/to /ebr /ebr /ebr nior ior ior , DC g. g. g.wor wor wor 2dp dp dp 00 r r r2 e e es s s4 s s s...,c c c 2 om/ om/ om/ 02 /659-0670 www.ebri.org 2 3 4