Millennials are plagued by ‘phantom wealth’: Why the generation doesn’t feel rich despite their net worth quadrupling

Millennial wealth in the United States has nearly quadrupled since 2019, outpacing both Gen X and baby boomers, yet most millennials don’t consider themselves rich.

Millennials, those born between 1981 and 1996 (give or take a year or two), are now worth a staggering $15.95 trillion, about four times what they were worth just five years ago, according to data from the Federal Reserve as reported by CNBC.

As of 2024, the average net worth of a millennial was a whopping $333,096, according to Empower, a financial services company. Its data shows millennials managed to grow their wealth more than any other generation in 2024, increasing their net worth by 13.7% (compared to 7.7% for all Americans), and increasing their 401Ks by 15.6% (nearly double that of the average American).

However, as millennials face high costs of living, due in part to inflation and high interest rates, many say they feel less wealthy than they appear on paper, a phenomenon known as “phantom wealth.” That’s because much of their net worth is tied up in assets not readily available, like 401Ks, homes, and the stock market.

That’s as there are three main areas of growth that are driving millennial wealth: real estate; stocks and mutual funds; and money they are either inheriting or getting as gifts from parents and family.

In the past several years, home equity has emerged as the greatest driver of wealth accumulation, and many millennials who bought homes before or during the pandemic are seeing their value greatly increase.

Millennials have also, on average, contributed more to their retirement funds, increasing the value of their holdings both in stocks and mutual funds.

Finally, they are also benefiting from their parents’ generosity, receiving financial gifts and inheriting wealth to pay off high student loans, mortgages, car payments, and high child care costs, financial planner Sophia Bera Daigle told CNBC.

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