Younger generations will likely be worse off financially during their retirement years than the generations before them, according to a new report from the Federal Reserve Bank of St. Louis.
The median wealth of American families headed by a person that is 62 or older shot up 40 percent from 1989 to 2013, after being adjusted for inflation. During that same time, the typical net worth of younger families fell, dropping 31 percent for those led by middle-aged people (between 40 and 61 years old) and 28 percent for families whose heads of household were under 40.
Additionally, the U.S. Census Bureau said that there is a significant underreporting of pension income on behalf of older Americans, meaning the gap could be wider still.
The study, compiled with data from the triennial Survey of Consumer Finances, will be updated with 2016 figures later this Fall.
Sturdy financial situations allowed those born between 1925 and 1944 to have higher financial health scores and more easily weather the Great Recession, according to the report.
Baby boomers fared worse economically, the report said, because their generation is much more populated than depression era generations, leading to more competition for jobs and investment opportunities.
The report said that younger generations can combat their stagnant wage trajectory by regularly saving their money, keeping an emergency fund, minimizing debt and creating a diverse portfolio of assets.