Millennials' Net Worth Quadruples, But 'Phantom Wealth' Raises Concerns
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The net worth of millennials has quadrupled due to a combination of factors, including significant increases in home prices and contributions to retirement accounts like 401(k)s. For older millennials, born in the 1980s, the median household net worth rose to $130,000 in 2022, a substantial increase from previous years. This growth is largely driven by the appreciation of real estate and the accumulation of retirement savings.
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However, this wealth is often referred to as "phantom wealth" because it does not necessarily translate into a tangible sense of financial security or liquidity. Many millennials own assets such as homes and retirement accounts, which are valuable on paper but not easily accessible for immediate financial needs. This disconnect between asset value and true financial security is what gives rise to the term "phantom wealth".Moreover, millennials still face significant economic challenges, including high levels of student debt, lower levels of homeownership compared to previous generations, and relatively flat incomes. These factors contribute to a sense of precariousness despite the apparent increase in net worth. The term "phantom wealth" encapsulates the idea that while millennials may appear wealthier on paper, their financial reality is more complex and less secure than it seems.
