Elder millennials are stuck in a lifestyle they can't afford

• Elder millennials are facing down slowing wage growth and wealth, layered atop past recessions.
• And new homeownership by younger millennials is outpacing elder millennials.

It's a bad time to be an elder millennial.

Elder millennials — whom Bank of America defines as those ages 35 to 45 — have already weathered a lot of economic storms. They've seen two recessions in their adult lives, a pandemic, and an economy that seemed to be stacked against them from the start.

But while the pandemic and its resulting labor market may have offered some economic reprieve, the financial walls might be closing in on elder millennials. That could be chalked up to the lifestyle expectations of a cohort that should be entering a more stable period of adulthood, one that includes comfortably spending, owning a house, and saving for retirement. Instead, they're falling behind in home ownership, accruing trillions in debt, and still scrambling to maintain their lifestyle.

Some of the blame rests with the recessions that came before.

"The older Millennial cohort is more likely to have been hit harder by the 2008 housing crisis, which potentially set them back financially relative to younger Millennials," Bank of America Institute wrote in their research on homeownership. As Business Insider's Hillary Hoffower previously reported, the Great Recession made millennials born in the 1980s a "lost generation" when it came to wealth accumulation. A 2018 report from the Federal Reserve Bank of St. Louis found that the wealth of millennials born in the 1980s was 34% below predictions.

"We believe many families in the youngest cohort we studied here — respondents born in the 1980s — are at substantial risk of accumulating less wealth over their life spans than the members of previous generations," the report's authors wrote.

But just as the pandemic led to a boom-bust cycle for younger workers, it seems like older millennials, too, are facing a bleak picture — especially as childcare costs mount, with older millennials likely facing the brunt of more costly care.

It's no wonder then that older millennials were the least likely to report feeling "financially well" in Bank of America's 2023 Workplace Benefits survey of around 1,300 employees. Indeed, 80% of older millennials said they felt stressed about their financial situations. Broadly, millennials' financial well-being score tumbled over the last year, according to data from Morning Consult. And by age, 35 to 44 year olds are carrying around a median $140,400, according to the Survey of Consumer Finances — the most median debt of any age cohort.

While that members of the elder millennial cohort hold a median of around $140,000 in debt, they only make a median of $65,676 a year, according to the latest earnings data from the Current Population Survey.

Workers ages 40 to 49 hold around $4.4 trillion in debt, per the Federal Reserve Bank of New York — the most of any age cohort they tracked. And that's also true for the youngest elder millennials, with workers ages 30 to 39 holding $3.9 trillion, slightly outpacing 50 to 59 year olds.

That's not stopping elder millennials from spending money (or racking up credit card debt). A report from the Federal Reserve Bank of New York finds that Americans ages 35 to 44 are still spending on retail and restaurants, more so than their younger compatriots ages 25 to 34. And while younger Americans are seeing more credit card debt go unpaid for 90 days, elder millennials are letting their debts languish too.

At the same time, though, Americans under 40 are seeing their real wealth grow at a much faster rate. And, while wage growth has been strong across all ages, it's been far more pronounced for workers under 24.

Meanwhile, the number of new foreclosures for those ages 40 to 49 has been ticking up, hitting around 8,800 in the third quarter of 2023.

Similarly, 40 to 49-year-olds also lead the pack when it comes to new bankruptcies, with around 28,500 people in that age cohort declaring bankruptcy in the third quarter of 2023. Among 30 to 39-year-olds, around 24,000 were also newly entering bankruptcy.

And then there's homeownership, or lack thereof. Through tracking internal data on escrow payments, Bank of America Institute found that older millennials are falling behind their younger millennial counterparts. They found that the number of older millennial households who had an escrow payment had fallen 2% year-over-year as of October 2023, which was lower than Gen X; on the flip slide, younger millennials' payments "remained relatively strong."

And so, for elder millennials, it's yet again a bleak picture. The things that were supposed to mark their entry into adulthood — home ownership, becoming a parent, and having enough disposable income to spend on things like going out — are instead only making their economic situation that much more difficult.

Are you an elder millennial dealing with a tough economic situation? Contact this reporter at jkaplan@insider.com.