MW Millennials are getting richer faster than previous generations. Here's how they're doing it.

By Gordon Gottsegen

Millennials have outpaced older generations in building wealth since the COVID-19 pandemic

Older generations used to give millennials a hard time for spending too much money on iPhones and avocado toast. As it turns out, their financial habits might be better than they were given credit for.

Data from investing platform Wealthfront shows that millennials have been accumulating wealth faster than previous generations since the onset of the COVID-19 pandemic five years ago.

Millennials on the platform grew their wealth by 137% over the past five years. Meanwhile, Gen X investors grew their wealth by 76% over the same time period, and baby boomers grew theirs by 40%. In January 2020, Wealthfront's average millennial client had an average of $45,600 saved and invested. Since then, that figure has grown to $108,130.

Wealthfront also noted that the number of millennial millionaires on the platform grew by 144%. At the same time, the number of Gen X millionaires grew by 31%.

"The biggest factor we see contributing to millennials' financial success is how they invest. Millennials are holding more in equities than previous generations were at their current age. This has led to a faster accumulation of wealth, because millennials are investing with strategies that have a higher risk-adjusted return. The majority of millennials aren't interested in risking their hard-earned money by trying to beat the market, and instead recognize that passive investing is the best approach for long-term wealth generation," David Fortunato, the chief executive of Wealthfront, told MarketWatch.

This data comes from over 1 million Wealthfront clients, but because it's based on a single platform, it has limitations: The 137% growth in millennials' assets doesn't take into account external investment accounts, 401(k)s, employee equity compensation or real-estate holdings.

But outside data also shows millennial net worth growing at faster rates. The total net worth of millennials in the U.S. nearly quadrupled from the third quarter of 2019 to the third quarter of 2024, growing from $3.9 trillion to just shy of $16 trillion, according to the Federal Reserve.

Millennials have also caught up when it comes to real-estate holdings. According to the Wall Street Journal, the real estate held by millennials grew in value by $2.5 trillion from 2020 to 2024. Although older generations still hold more in total net worth and real estate, millennials are growing their holdings at faster rates. Mortgage data linked to Wealthfront showed that among millennials, home value increased more than 40% in the past five years, while it grew 33% for Gen X and 29% for baby boomers.

Millennials were born between 1981 and 1996, while members of Generation X were born between 1965 and 1980. Boomers, meanwhile, were born between 1946 and 1964.

Fortunato also noted that millennials are aggressive savers, which has helped them accumulate wealth.

"When looking at the savings rate by age group, we see that the millennial savings rate is significantly higher than the savings rate of previous generations. We expect to see this pattern become even more pronounced in the coming years as millennials continue to grow in their careers and accumulate wealth," he said.

All this is good news for millennials, who as a group have faced financial challenges. Many entered their professional careers during the 2007-09 recession, and since then they've had to deal with things like student loans, wage stagnation, an expensive housing market, the effects of the pandemic and high inflation.

"Every generation is shaped by the broader economic circumstances they grow up with, and this is no different for millennials," Fortunato said. "Like many millennials who were impacted by the Great Recession, I graduated college in 2008. Entering the job market during a global recession made a lasting impact on how I approach my finances. It emphasized the importance of being financially prepared for unexpected events, and it also showed me that the market will eventually recover."

Wealthfront data supports the notion that millennials may have learned healthy financial habits despite these challenges. The company noted that millennials continued depositing money into their accounts at steadier rates than older generations at the onset of the pandemic. It also found that millennials grew their retirement accounts faster than Gen X investors - despite the fact that Gen X is closer to retirement. From March 2020 to February 2025, millennial IRA balances grew 112%, while Gen X IRA balances grew 52%. This was due to both higher contributions and market appreciation.

"This shows how resilient millennials are, which is largely driven by challenges they've lived through. This resiliency, plus their commitment to investing with a long-term mindset, have helped millennials benefit from strong market appreciation over the last five years," Fortunato said.

-Gordon Gottsegen

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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March 06, 2025 13:00 ET (18:00 GMT)

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