Baby boomers are worth more than ever, but millennials are still lagging behind - and the reason why is clear

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Baby boomers are the only generation worth more than people of the same age 20 years ago.

• According to Federal Reserve data analyzed by MagnifyMoney, baby boomers and millennials are now farther apart in wealth than comparable generations 20 years ago.
• Today's baby boomers are slightly wealthier than people in their 50s and 60s were 20 years ago, while millennials are less wealthy than their age group 20 years ago.
• The main factor keeping millennials from building their net worth at the pace of their parents' generation is clear: Millennials hold a large amount of debt.
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Comparing baby boomers to millennials might be comparing apples to oranges. But new data shows that millennials are losing ground compared to the generation before them at the same age. 

According to analysis of Federal Reserve data by MagnifyMoney, the wealth gap between baby boomers (those age 52 to 70 in 2016), and millennials (age 20 to 35 in 2016), has widened significantly compared to generations of the same ages 20 years ago. 

The data looks at net worth, or the total amount of a person's assets minus debts. Assets like home equity, savings, and investments play a large role in this figure, as do debts like student loans and mortgages.

Millennials dropped $1,200 in median net worth from those of the same age in 1998. And millennials aren't the only ones; Gen Xers have fallen $26,300 when compared with the median net worth of the same age group 20 years ago.

According to this data, baby boomers are the only generation to have their net worth increase when compared to those who were in their 50s and 60s in 1998. The median household net worth for those age 52 to 70 is now $206,700, compared to $205,200 for the same age range in 1998 - a $1,500 increase.

Debt is holding millennials back from building wealth

To put it simply: Millennials have more debt. They have more debt than boomers do now, and they have more debt than 20 and 30-somethings held two decades years ago.

According to MagnifyMoney's calculations, liabilities like debt are 44% of the amount of millennials' assets. Those of the same age group 20 years ago had liabilities that were just 36% of the value of their assets, an increase of 8% in the past 20 years.

Factors like homeownership and student loan debt are two large factors. College costs have been steadily rising, as have student loans balances. While holding a significant portion of the $1 trillion in student loan debt in the US, many millennials have put off purchasing assets like a home.

And when millennials finally do buy a home, they're putting down a smaller down payment, as Business Insider's Tanza Loudenback reported. With higher mortgage balances and less equity, homes millennials do own add less to their assets.

Millennials are buying homes at a much lower rate than generations before them did at the same ages. Data from the American Community Survey and Urban Institute show that while 45% of baby boomers and Gen Xers were homeowners between the ages of 25 and 34, only 37% of millennials can say the same today.

With fewer assets and greater debt, millennials are lagging behind their parents' generation. As baby boomers are the only generation to increase in wealth from their 1998 counterparts, the gap between them and the millennials continues to widen.

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