The 'lost generation' of millennials born in the 1980s may never be as rich as their parents

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Millennials born in the 1980s are at greater risk of accumulating less wealth during their lives, according to a new report by the Federal Reserve Bank of St. Louis.

• Millennials face unique financial struggles compared to previous generations.
• Millennials born in the 1980s are at the risk of becoming a "lost generation" that accumulates less wealth during their lives, according to a new report by the Federal Reserve Bank of St. Louis.
• Coming of age during the Great Recession, this millennial cohort has faced high unemployment rates, an increased cost of living, and mounting debt.

From saving longer to buy a home to facing increasing living costs, millennials are balancing myriad money woes compared to previous generations.

All of these hurdles combined mean they're at risk of accumulating less wealth during their lives. As a quick recap, millennials are defined as the generation born between 1981 and 1996, growing up or entering the workforce during the Great Recession.

Those born in the 1980s are at the greatest risk of becoming a "lost generation" for wealth accumulation, reveals a new report by the Federal Reserve Bank of St. Louis.

"Not only is their wealth shortfall in 2016 very large in percentage terms, but the typical 1980s family actually lost ground in relative terms between 2010 and 2016, a period of rapidly rising asset values that buoyed the wealth of all older cohorts," write the report's authors.

As of 2016, those born in this decade had wealth levels 34% below where they would be if the financial crisis hadn't occurred. Those born in the 1970s had wealth levels 18% under where they should have been, and the wealth levels of 1960s people were down by 11%.

While the Great Recession "inflicted deep and widespread losses of income and wealth on the typical American family" and wealth losses affected all ages, families younger than retirement age suffered the most.

"The late 2000s recession threw up an obstacle in that dynamic for younger workers," writes Michael S. Derby of The Wall Street Journal, adding that the unemployment rate was nearly 10% in 2009. "People of the 1980s generation started their working lives in a time of troubled investment markets, high unemployment, and persistently weak wage gains."

And they've been scrambling to catch up ever since. The 1980s cohort is the slowest to recover from the Great Recession, according to the St. Louis Fed.

While millennials have benefited from a 67% rise in wages since 1970, this increase hasn't kept up with inflating living costs. Rent, home prices, and college tuition have all increased faster than incomes in the US, according to research conducted by Student Loan Hero. And that's not to mention the increasing costs for childcare, healthcare, and entertainment.

"Millennials coming of age during the Great Recession faced a rude awakening when the high cost of an education didn't lead to higher earnings," writes Shannon Insler in an article for Student Loan Hero. "Underemployment and living costs coupled with student loan payments have made it difficult for millennials to get ahead."

In addition to student loan payments, the 1980s generation carries auto and credit-card debt - debt that the St. Louis Fed deems as not "productive."

However, not all is lost.

Thanks to time and high education levels, "It is possible that the income and wealth trajectories of this generation will be steeper than those of earlier generations, allowing many families to achieve their wealth goals in the end," wrote the authors.