America’s youngest adult generation is focusing on building wealth and the past year has helped them with a boost in their disposable income.
An analysis of millions of data points from tax filer clients of H&R Block paint a picture of economic mobility across generations, with 66% across income levels and generations showing optimism about their income growth, retirement prospects, and ability to maintain financial stability, despite the threat of unmanageable debt.
The firm also used 25 years of tax return data to spot long-term trends and make comparisons between generations.
It found that each generation has improved on the income and buying power of the last and this is reflected in the sentiment of generations with each believing they will exceed their parents’ economic opportunities – 70% of Gen Zs said so along with 65% of Millennials and 60% of Boomers, although notably this falls to just 53% among Gen Xers.
Specifically on buying power, Gen Zs have 30% more than Millennials did at their age, and Millennials have 30% more than Gen Xers did at their age. Gen X is enjoying 20% more buying power than Boomers did at the same age.
Debt remains a major issue though with Gen X carrying the most credit card debt (55%) followed closely by Millennials (49%), Boomers (47%), and then Gen Z (39%). Gen Z feel the most burdened though, as shown in another recent survey.
Two in three who have credit card debt say it’s at an unmanageable level. Meanwhile, as many as one in six hold student debt with more than a third saying it’s more than they can manage.
Gen X is the most likely to be “not at all confident” that they are doing what is needed to meet longer-term goals, such as saving for retirement.
But younger generations are making some significant choices on how to spend their money, or not, with almost 17% of Millennials identifying as ‘double income no kids’ in 2024 compared to just 7% in 2015. Given that it’s estimated to cost almost $240K to raise a child to 18 (according to a LendingTree report) this frees up a lot of cash.
Gen Z is going a few steps further to maximize their wealth including job-hopping for salary increases and side hustles to augment their income. More than half plan to monetize their hobbies in the next year.
This youngest generation of American adults are prioritizing financial goals including buying a home (63%) and saving for retirement (86%), and investing is a key focus with 41% contributing to employer-sponsored plans, 22% using cryptos, and 15% opting for gold and silver. The report found that they are also twice as likely to invest in fine art and collectibles than Millennials (9% vs. 4%).
From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.
Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.
“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.
Sellers shift focus: It's not about succession anymore.
Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.