Millennial Net Wealth Is Expected To Reach $140 Trillion by 2045

When it comes to managing their money, millennials have long been underestimated. Headlines often doubt this generation’s ability to overcome the effects of the Great Recession and reach the same financial milestones as their parents. But at Wealthfront, we’ve never questioned their potential. In fact, we’ve built a profitable and growing business by creating smart financial products designed specifically for young professionals. Since launching in 2011, we’ve witnessed firsthand the financial achievements and resilience of millennials through a wide range of macroeconomic conditions. 

We believe it’s important to understand the future of millennial wealth, which is why we asked leading global economic advisory firm Oxford Economics to develop an independent projection. In a new report released today, Oxford Economics’ analysis shows a generation that has not only defied the narrative but is on track to accumulate assets rapidly over the next 20 years. According to the report, millennial households’ net wealth is expected to grow by more than 11% each year over the next two decades, reaching $140 trillion by 2045. This is in comparison to just a 5.8% growth rate across the total United States population over the same time period. (Note that the report defines millennials as those born in 1981 or later, aligning with the Federal Reserve definition.)

Crucially, this forecast only reflects assets currently held by millennials and doesn’t account for future inheritance. While much attention has been given to the importance of the “great wealth transfer,” this report shows young professionals are creating their own success through smart saving and investing habits.   

The dramatic wealth accumulation of younger generations might be a surprise based on the broader media narrative, but it shouldn’t be. At Wealthfront, we have focused on providing automated financial advice and products designed to help young professionals build lasting wealth through consistent, low-cost, tax-efficient investing and high-yield cash management. This report shows that this generation is already benefiting from these strategies and is well set up to continue achieving their financial goals.

In this post, we’ll dive deeper into three key takeaways from the new Oxford Economics report.

Takeaway #1: Millennials primarily hold wealth in equities, retirement assets, and real estate

The biggest factor driving this impressive year-over-year increase in millennial wealth is where this generation holds their assets. The report finds that the majority of millennial households’ assets are held in real estate, equities and other assets, and pensions (which includes 401(k) investments). The data also shows that each of these asset types is expected to grow rapidly over the next 20 years: By 2045, Oxford Economics predicts that millennials’ real estate assets will increase by 7.0% annually, equities will increase by 12.9% annually, and pensions will increase by 13.6% annually. (These growth rates reflect returns of the asset class in addition to effects from expected deposits and changes in asset allocations over time).

Notably, increased retirement contributions by millennials over time is expected to make retirement assets the biggest contributor to their overall wealth. By 2045, millennials are expected to hold $30 trillion in pensions, $28 trillion in other assets (including liquid assets, like cash), $22 trillion in equities, and $21 trillion in real estate. Thanks to expected career growth, increasing incomes, and a focus on long-term financial planning, this generation is positioned to accumulate wealth more rapidly than the generations before them.

Takeaway #2: Millennials invest more in equities than older generations

According to Oxford Economics data, young professionals are already holding more of their wealth in equities than previous generations were at the same age. Millennials currently hold about 13% of their wealth in equities, compared to less than 10% held by baby boomers at age 34, and this pattern is expected to continue over the next 20 years. 

Because millennials are investing earlier in equities, which have a higher expected risk-adjusted return than other asset classes, they are expected to benefit from a faster accumulation of wealth. While baby boomers currently hold about 25% of their wealth in equities at age 67, the data forecasts millennials will hold more than 30% of their wealth in equities when they reach the same age. 

When looking at current Wealthfront clients, we see a similar pattern. In the past five years we found that our millennial clients have grown their average wealth faster than older generations, in part because they have invested consistently through varying market environments. Since January 1, 2020, these clients have increased their Wealthfront assets by 137%, while wealth held by Gen X and baby boomer clients grew by 76% and 40%, respectively over the same time period.

Takeaway #3: Millennials are saving more aggressively than older generations

The Oxford Economics report shows that millennials are saving significantly more than baby boomers at the same age. Over the past ten years, the savings rate of millennials has outpaced the national average by 4.9 percentage points. Over the same ten-year span of baby boomers’ lives, their savings rate also outpaced the national average, but only by 2.5 percentage points. This shows that millennials are not only prioritizing saving earlier in life, but also that they’re doing so at a higher rate. 

This trend is expected to continue. As young professionals move into their peak earning years, Oxford Economics projects that their savings rate will increase even further above the national average over the next two decades, peaking at a differential of 14 percentage points as they approach 50 years old. And contrary to prominent media narratives, this generation isn’t weighed down by outsized debt, either. In fact, the report shows millennial debt levels are comparable to those of older generations at similar life stages. 

A resilient generation set up for future success

Millennials have long been portrayed as lagging financially behind older generations—but the data tells a different story. This generation has embraced smart financial habits that position them well for long-term financial growth. Their commitment to consistent saving and investing is already paying off, and the data shows this is just the beginning.

As young professionals advance in their careers, their wealth will continue to accumulate, and we at Wealthfront are excited to grow right alongside them. We know this generation expects more from the financial industry, and that’s exactly why we build smart, automated personal finance products designed to help this generation turn their savings into long-term wealth.

The Oxford Economics report validates what we’ve seen for years: Millennials are on a clear path to financial success. They have built a strong foundation and are poised for significant growth in the decades ahead. We look forward to continuing to help millennials and future generations achieve financial freedom with products designed for a digital world.