The Great Recession hurt. It destroyed wealth across generations…for some more than others.
Early baby boomers (born between 1946 and 1955) lost 28% of their median net worth from 2007 to 2010. Late boomers (born between 1956 and 1965) lost 25%. Gen-Xers (born between 1966 and 1975) lost almost half of their net worth – 45% – which amounts to an average $33,000 hit, according to a new study from the Pew Charitable Trusts.
For Gen-Xers, the rub is that they weren’t in great shape to begin with. At the outset of the recession, they didn’t have that much in the way of savings, and the downturn only eroded what they did have. Because of that, “Gen-X is the first generation that’s unlikely to exceed the wealth of the group that came before it and face downward mobility in retirement”. Late boomers aren’t fairing much better.
On the other hand, early boomers might be “the last group on track to retire with enough savings to maintain their financial security” since they were in a better position before the recession, after benefiting from the dot-com bubble and the housing boom, which left them with higher net worth and home equity.
While early boomers will go into retirement with enough assets and savings to replace between 70 to 80% of their income, late boomers will replace around 60%. Gen-Xers will only replace about 50% of their preretirement income. In other words, the recession will follow a lot of Americans beyond their working years.