Why do young Americans feel trapped financially?

Image Credits: UnsplashImage Credits: Unsplash
  • While millennials' net worth appears higher on paper, wealth is concentrated among top earners, leaving most struggling with stagnant wages and rising costs.
  • Younger Americans face greater financial risks due to disappearing pensions, uncertain Social Security, and reliance on volatile markets for retirement savings.
  • High housing costs, student debt, and policy gridlock make traditional markers of financial stability—like homeownership—increasingly unattainable.

[UNITED STATES] For many millennials and Gen Z, achieving financial security seems elusive — despite seeing their net worth grow on paper.

Recent findings highlight the generational divide. A 2023 Pew Research study reveals that although millennials have amassed a greater share of wealth than Gen X had at the same stage in life, this wealth is concentrated primarily among the top 10% of earners. For most, stagnant wages and soaring costs have eroded the purchasing power that previous generations once took for granted.

“We’re living in two separate economies,” remarked Freddie Smith, an economics content creator, noting the stark financial contrasts between generations. “The middle class, unfortunately, is gone for millennials and Gen Zers. Or, at best, the goalposts have shifted. It’s still possible, but now you need to earn over six figures to maintain a middle-class lifestyle.”

Rachel Schneider, CEO of emergency payment fintech company Canary and co-author of The Financial Diaries, described many Americans as living “at break even.”

This financial vulnerability is worsened by the decline of safety nets. Employer-sponsored pensions have become increasingly rare, and the long-term stability of Social Security remains uncertain. Younger workers are now more reliant on volatile investment markets for retirement planning, transferring more risk to individuals rather than institutions.

“As the year progresses, they may earn enough to cover basic living expenses and bills, but a single setback can throw them off course,” Schneider told. Meanwhile, costs continue to climb. Housing, healthcare, and insurance have all become significantly more expensive. Furthermore, unlike previous generations, today’s Americans are shouldering more responsibility for funding their own retirement.

The housing crisis is a stark example of this pressure. Homeownership rates among adults under 35 have dropped significantly, with the National Association of Realtors reporting that the median down payment for first-time buyers has nearly doubled since the 1990s — even when adjusted for inflation. For many, the dream of homeownership now demands either familial wealth or extraordinary sacrifices.

Despite older generations’ critiques of millennials and Gen Z for perceived lifestyle inflation, many experts argue the issue is more structural than behavioral. “It’s much harder for young people today to save for the traditional markers of the American Dream than it was for earlier generations,” said Joanne Hsu, director of the University of Michigan’s Surveys of Consumers and a research associate professor.

Policy solutions remain fiercely debated. Some economists call for expanded housing subsidies and student debt relief, while others advocate for wage increases linked to productivity. However, partisan gridlock has stalled most large-scale reforms, leaving younger Americans to face these challenges with limited systemic support.

“People often experience shame and distress when their financial lives don’t go as planned,” Schneider said. “However, much of what they’re going through isn’t the result of anything they could have done differently.”

As traditional markers of success become more distant, young Americans are adapting. More are living with their parents for extended periods, sharing childcare responsibilities across households, and seeking new ways to foster community.


Ad Banner
Advertisement by Open Privilege
United States
Image Credits: Unsplash
June 13, 2025 at 6:00:00 PM

What Republican ACA cuts reveal about health planning gaps

It’s a paradox that doesn’t sit easily with political branding: nearly half of the people who purchase Affordable Care Act (ACA) plans identify...

United States
Image Credits: Unsplash
June 12, 2025 at 7:30:00 PM

Why your investing portfolio needs to go international

Let’s get real: the average Gen Z or millennial portfolio today is still very US-heavy. Between S&P 500 ETFs, tech stocks, and US-based...

Image Credits: Unsplash
June 12, 2025 at 7:00:00 PM

Why younger workers are planning for their flextirement now

A slow shift, a louder signal: how millennials and Gen Z are restructuring work to pace—not escape. On Slack, they’re declining calendar invites...

Singapore
Image Credits: Unsplash
June 12, 2025 at 6:30:00 PM

Why more Singaporeans are downgrading their integrated Shield Plans

Once a no-brainer for upwardly mobile professionals, private health insurance in Singapore is no longer the default decision it once was. For those...

United States
Image Credits: Unsplash
June 12, 2025 at 6:00:00 PM

What Gen Z investors should actually learn

If you’ve ever opened your investing app after a Trump speech or tariff tweet, you know the feeling: a sea of red, your...

United States
Image Credits: Unsplash
June 12, 2025 at 4:00:00 PM

Trump Accounts savings plan could help families—but at what cost?

A new provision tucked into the Republican-backed “big beautiful bill” in Congress proposes a federal child savings program with a $1,000 head start...

Singapore
Image Credits: Unsplash
June 12, 2025 at 3:30:00 PM

Questions to ask your insurance agent in Singapore

Singapore's insurance landscape hasn’t undergone a major legislative overhaul recently, but that doesn't mean nothing's changed. Over the past decade, the rise of...

Singapore
Image Credits: Unsplash
June 11, 2025 at 7:30:00 PM

Why financial jargon still confuses young Singaporeans

Singapore’s younger adults are stepping into the world of investing with growing confidence. Many begin in university; others enter via digital platforms not...

Image Credits: Unsplash
June 11, 2025 at 7:00:00 PM

What to do after a cyberattack

So, another company got hacked. Your inbox lights up with a “We care about your privacy” email, and suddenly you’re wondering if some...

United States
Image Credits: Unsplash
June 11, 2025 at 6:00:00 PM

Private market access for retail investors comes with new risks

If you’ve seen the words “private equity” and “retirement fund” in the same sentence lately, you’re not alone. What used to be an...

Singapore
Image Credits: Unsplash
June 11, 2025 at 5:30:00 PM

The hidden dangers of cross-border property deals

It started with what looked like a promising investment pitch. By the time the truth surfaced, a Singaporean couple had lost nearly S$300,000—with...

United States
Image Credits: Unsplash
June 11, 2025 at 5:30:00 PM

Americans are finally saving almost what they’re supposed to for retirement

So, apparently we’re doing it. After decades of scary charts, guilt-trip headlines, and “you’ll work till you die” TikToks, Americans are finally saving...

Ad Banner
Advertisement by Open Privilege
Load More
Ad Banner
Advertisement by Open Privilege