Millions of millennials could soon enter a midlife crisis. But they're going to spend and divorce less — and value experiences more — than prior generations.
- Millions of millennials could experience a midlife crisis over the next decade.
- But they're likely to respond to it differently than previous generations.
The midlife crisis could be coming for millennials over the next decade, but companies shouldn't count on a spending spree as the newest generation to hit middle age has less money and different lifestyle preferences than its predecessors.
Millions of millennials — whose ages range between 27 and 42 — will turn 40 this year, with many more following them in the years to come. And while there's nothing inherently treacherous about this milestone, there's reason to believe many of them could experience some form of a midlife crisis as they reach middle-age.
Last September, the National Bureau of Economic Research published a working paper that documented a "crisis of midlife" in rich countries like the United States. Along with a decline in basic measures of life satisfaction, the researchers found middle-age upticks in intense job strain, suicide, sleeping problems, alcohol dependence, and extreme depression.
"We believe the seriousness of this societal problem has not been grasped by the affluent world's policy-makers," they wrote.
But even if the midlife crisis persists among millennials, they're unlikely to respond to it the same way as prior generations. Buying a sports car and getting a divorce, for instance, two stereotypical responses to the midlife crisis, might not be preferable — or even possible — for many millennials.
Many millennials don't have the money for a sports car, and if they did, they'd rather spend it on experiences
In 2021, the typical 40-year-old millennial earned $49,000. While this is more than the inflation-adjusted $43,000 and $39,000 Gen Xers and boomers earned at the same age, rising costs for certain big-ticket items like college, healthcare, and childcare have ultimately left millennials worse off.
While millennials' net worth has risen in recent years, they only account for roughly 7% of the nation's total wealth, according to 2022 Federal Reserve data, far less than the 22% boomers held at similar ages. In 2020, the St. Louis Fed found that the typical millennial family was 34% poorer than expected when compared to the wealth of "earlier generations at the same age." The impact of the Great Recession was named among the key reasons why.
While millennials' spending habits have been blamed for killing everything from cereal to casual dining, a 2018 Fed study found "little evidence" that millennials have "significantly different tastes" than prior generations when it comes to spending on things like cars, food, and housing. The reason they spent less in some of these areas, the Fed concluded, was simply because millennials were "less well off than members of earlier generations."
That said, there's some evidence that millennials' spending habits are actually a bit different than those of Gen X and boomers.
For instance, millennials may be more likely to save than prior generations. A 2020 Bank of America report found that the average millennial started saving for retirement at age 24, while Gen X and boomers didn't begin till age 30 and 33 respectively.
Other research suggests millennials don't just spend less — they prioritize different things.
A 2014 Harris Group study found that since 1987, the share of US consumer spending on live experiences and events had increased 70%, and that 72% of millennials preferred to spend money on experiences rather than material goods. It's among the reasons some have called them the "experience generation."
While some millennials may simply see experiences as great opportunities to fill their social media profiles, many say they genuinely value experiences. So when the midlife crisis comes, millennials may respond by taking a big vacation rather than buying a sports car.
Millennials are less likely to get divorced — in part because they're less likely to marry
Divorce is another outcome people often associate with a midlife crisis.
But one has to be married to get a divorce, and many millennials haven't tied the knot. In 2019, Pew Research found that only 44% of millennials were currently married, compared to the 53% of boomers and 61% of Gen Xers who were at a similar age. While this can partially be attributed to people getting married later in life, many millennials say they have no intention to ever marry.
The lower marriage rate among millennials is among the reasons they've also had fewer children than prior generations. Without childcare obligations and expenses holding them back, this could make it easier for many of them to take part in — and afford — the experiences they love when they reach middle-age.
Smaller family units have made it easier for some millennials — some of whom would prefer to avoid buying a car for environmental reasons — to hold off on the purchase. It's also made it easier for millennials who work remotely to take advantage of this flexibility and move wherever they want.
Perhaps in the future, some millennials facing low savings and a midlife crisis won't buy a sports car or get divorced — but pick up and move somewhere new and more affordable.
- World Cup 2023 final squads – Ind, Aus, Eng and all the other teams
- Eating your way to clear vision: 10 foods for healthy eyes
- 10 cafes in Bangalore offering the best of ambiance and cuisine
- Centre's fiscal deficit at Aug-end touches 36% of full-year target: CGA
- Domestic occupiers keep office space demand high in 2023