How are Millennials doing financially? There's good news and bad news.

Millennials are now the largest generation in America, and their financial obstacles, including high debt levels and living costs, are well known. But they have some advantages over older generations, too. 

Ann Hermes/The Christian Science Monitor/File
At left, Kendra J. Rolle is interviewed by Aden McClaskie for temp-for-hire and temp work at Careerxchange, on May 15, 2014 in Miami, Florida.

Millennials are the upstart generation no more: they’ve now surpassed Baby Boomers to become the largest generation in American history.

There were 75.4 million Millennials in 2015, compared to 74.9 million Baby Boomers, according to Census Bureau population statistics analyzed by the Pew Research Center. Millennials surpassed Boomers, in part, thanks to the large number of young immigrants who are entering the country. Fewer older immigrants are coming in to replace Baby Boomers. Pew projects that the Millennial population will peak with 81.1 million living members in 2036.

Not only are Millennials the largest living generation in America today, they have become the largest demographic in the US labor force, overtaking Generation X.  And they have weighty financial concerns. Dan Schawbel, a Partner at Future Workplace who studies Millennials in the workplace, explains that eight years on, the cloud of the Great Recession in 2008 still hangs over many of them.

“Millennials are worse off than boomers because of the economic crisis that left them having a delayed adulthood,” he writes in an e-mail. “This is a generation that strives to follow their passions but those aren't aligned to the 4.5 million job openings in America right now, which mainly focus on the trades and STEM.”

On the other hand, Mr. Schawbel says, Millennials are better off than previous generations because “[T]hey have access to more people, technology and information than any other generation has ever had which gives them a competitive advantage and many companies are laying off high-salaried boomers to make way for them.”

The financial help that many Millennials get from their parents when they’re just starting out also makes a difference. In a report released by UBS Investor Watch on Monday, 80 percent of Baby Boomer parents surveyed reported giving their Millennial kids some form of financial support as they enter the working world, including 28 percent of parents who said that they’ve contributed money towards rent and housing costs.

Fortunately, help from Mom and Dad hasn’t prevented Millennials from establishing sound financial habits.

“We see some encouraging signs with regards to Millennials… they’ve established the all-important habit of saving,” chief financial analyst Greg McBride explains in an interview with The Christian Science Monitor. “Establishing that habit earlier when your earnings are lower is such a benefit.”

Mr. McBride says that many Millennials are also taking the initiative to participate in employer-provided 401(k) plans. Yet Millennials move much more cautiously than their predecessors when it comes to the stock market. McBride says this could put a damper on their nest eggs in the long run because they are not working on getting the full benefit of compounding returns.

Schawbel, the Millennial workplace expert, says Millennials want to save more but many are limited by their financial circumstances.

"[Total student loan debt has topped] $1.3 trillion [in the US] and there [are] approximately three job seekers competing for each job,” he says. 

Rising economic inequality and slow economic growth also play a role. Although wages rose in 2015, income inequality also climbed during the same period. The wage gap between the middle and lower economic classes is diminishing, while the imbalance between high earners and other classes is widening. Low wages still permeate at the bottom, including at both minimum-wage and entry-level jobs.

“We’re in a slow-growth economy. I think that’s a bit of a headwind in terms of future job prospects and earnings potential, and investment returns,” McBride says.

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