How to Have A Better Midlife Crisis

Millennials are trying to do their 40s differently than prior generations. They don’t really have a choice

- Mark Ellwood

In 2023, 3.6 million Americans will turn 40 and, if they haven’t already, promptly freak out. This will be the third batch of millennials to hit the milestone. But this group probably won’t rebel like their parents, who in their 40s and 50s bought flashy boats or booked flights to Bali after jumping off the corporate ladder. They aren’t divorcing a spouse (they never had one) or getting a tattoo (they already have them). No, this generation is going to do the midlife crisis differently. They can’t afford to do otherwise.

The Emerging Millennial Wealth Gap, a 2019 report from the nonpartisan think tank New America, shows that those born from 1981 to 1996 earn 20% less than baby boomers did at their age. And data from the Federal Reserve Bank of St. Louis say their assets average $162,000, versus $198,000 for Gen X at the same age.

Many factors have conspired to leave those midlifing millennials so much poorer than their precursors. Most prominent, the dot-com bust and subsequent financial crisis of 2008 shaped their early working lives. The National Bureau of Economic Research says individuals experience 70% of their overall wage growth during the first decade of their working life; if that period overlaps with a downturn, there’s likely to be a 9% reduction long term. The Center for Retirement Research’s 2021 report said millennials age 28-38 had a lower net-wealth-to-income ratio than any previous generation.