Shot of a young couple going over their finances together at home
From Pivot Magazine

Generational wealth: is it harder for young people to get ahead?

There are several reasons why Generation Z and millennials may be finding it more difficult to accumulate wealth than their baby boomer parents did

Shot of a young couple going over their finances together at homeWith two (or even three) recessions under their belts and a period of high inflation, younger generations are learning the importance of financial discipline the hard way (Getty Images/katleho Seisa)

Facing overheated housing markets, inflation, and a recession, almost half of Canadians say they are worse off financially than they were a year ago. Are young people more likely to be impacted? Do they really have it harder? We’ve all heard that the baby boomers had it easier, but they also experienced sky-high interest rates, hovering around 10 per cent until the early 1990s.

Since then, the economic environment has been particularly favourable, as the net worth of boomers and late career workers has increased by 350 per cent over 20 years. While demographics partly explain this trend, the fact remains that those aged 44 and under have seen their net worth increase the slowest. While it’s often the case that people get wealthier with age, we still have to be able to start “accumulating,” which seems to be increasingly difficult without help from family. And how many years are we looking at? Freedom 65? 70? 75?


The barriers to accumulating wealth are greater than before. Tuition has risen three times faster than inflation since 1985, which has nearly tripled the average student debt over 30 years. Home ownership has become more difficult, with the down payment for a home having doubled relative to family income compared to 1980. Since then, the average age of first-time home buyers, now forced to save longer, has also increased by four years.

On the work side, fewer and fewer employers, especially in the private sector, are offering a pension plan—and when they do, it is often less generous. Additionally, as the number of workers contributing to these plans will continue to decrease, disbursements will increase.

But it’s not all doom and gloom for young people. The increased contribution to household income from women has allowed families to outpace inflation in the long term in Canada, although less true recently. The labour shortage caused by an aging population has created a favourable job market, such that any economic downturn should have limited impacts on the unemployment rate and employment.


Young people need to pay back more student debt, save more and plan for retirement. These are all good reasons why people are changing jobs based on pay—which may partly explain why the average length of employment is 15 per cent shorter than in the 1990s.

According to CPA Canada’s Thriving or Surviving study, this race against the clock (in terms of saving, investing and paying off debt) is also creating more stress for younger people. The study also shows they are very critical of their financial literacy and they emphasize the importance of starting to save early.
With two (or even three) recessions under their belts and a period of high inflation, Generation Z and millennials are learning the importance of financial discipline the hard way, which is a far cry from how they are often characterized.

Many baby boomers realize this and are willing to help them generously: 25 per cent of those aged 18 to 34 have already given and/or received an early inheritance. Those aged 18 to 34 also seem to understand the importance of intergenerational wealth transfer as their age group transferred money to their family member three times more than other generations during the pandemic. And for good reasons, for example, to help cover a relative’s financial emergency.

One thing is certain: despite technological breakthroughs in personal finance (apps gaining popularity, digitization of cash, the rise of new assets such as cryptocurrencies, robo-advisers, etc.), the fundamentals of financial literacy remain essential and more relevant than ever. They are critical to empowering young people, especially those who have no inheritance and must rely solely on their knowledge, skills and luck to improve their financial situation.


Check out CPA Canada’s Thriving or Surviving study and learn how two CPAsone a millennial, one a gen Xdiffer in their views on finance. Plus, check out CPA Canada’s extensive financial literacy resources.