Millennials and Gen Z saw their wealth balloon during the pandemic

• It turns out that Americans under 40 did pretty well during the pandemic-era.
• A new analysis from Liberty Street Economics finds younger Americans saw their net worths swell.

It turns out that the pandemic was a boon for America's youngest workers.

A new analysis from the Liberty Street Economics blog at the Federal Reserve Bank of New York looks at how wealth changed for different groups from the first quarter of 2019 through the third quarter of 2023. And Americans under 40 did pretty darn well.

Coming into the pandemic, Americans under 40 were holding just under 6% of all US wealth, according to Liberty Street Economics, even as they made up just under 40% of adults. That's changed a bit since their pandemic-era boon. And it was a boon: Americans under 40 — who comprise both Gen Zers old enough to be in the full-time workforce, and almost all millennials — saw their real wealth skyrocket by around 80%.

That's not the case for all age groups; Americans who are more firmly Gen Xers saw more modest growth in wealth, and while those over the age of 55 also saw sizable gains, it wasn't anywhere close to the youngest Americans.

It's yet another wrinkle in the pandemic-era story of wealth accumulation. The pandemic led to a boom-bust cycle for some Americans, especially younger ones, who suddenly had a cushion of savings — it's hard to spend when you can't go outside — and were additionally bolstered by unprecedented stimulus checks, enhanced unemployment benefits, and the pause on federal student loan payments. And while Gen Zers and millennials say they're facing more of a crunch now, the latest data shows that the particularly unique pandemic-era combination of stimulus, savings, and investing paid off.

"The youngest age group is also the poorest and thus received much of the COVID-era fiscal stimulus, granting them excess savings to invest in equities," report authors Rajashri Chakrabarti, Natalia Emanuel, and Ben Lahey write.

Financial assets were the big driver of younger Americans' wealth accumulation, according to Liberty Street Economics' analysis, with the real value of their assets growing by over 50% — far greater than the 3% increase in value for Americans ages 40 to 54.

Real estate assets saw similar increases across all age groups — around 40%, per the analysis — but younger Americans were especially putting their money towards equities and mutual funds.

Those younger Americans were willing to make riskier investments, as the analysis notes, perhaps due to just how far out they are from retiring. While Gen Z and millennials might face a tougher retirement overall — although many are aiming and working towards being able to clock out early — that investment strategy has paid off for them.

But those net worth increases also come as younger Americans shoulder more debt. Consumer debt swelled by $212 billion in the last quarter of 2023, and Gen Zers and millennials lead the pack when it comes to debt transitioning into delinquency. For millennials, that's a slight uptick in delinquency from the fourth quarter of 2019, although Gen Zers are hovering slightly below late-2019 levels.