Panel, Conference Presentation
Addressing the Financial Headwinds Faced by Gen Z and Millennials | Global Conference 2025
Milken InstituteCheryl Evans, Kahlil Byrd, Catherine Collinson, Alexis Crow, Dorothy Kelly, Sylvia Kwan, Dot Kelly
- Demographic shifts will see approximately 11,200 individuals turning 65 daily over a three-year period, coinciding with a structural economic decline in advanced economies (US, Japan, UK, France, Canada) as manufacturing transitions to services and global trade headwinds reduce growth potential.
- Younger generations face unresolved financial damage from the Great Recession and pandemic, with Gen Z and Millennials projected to experience more employment setbacks than older cohorts, potentially delaying retirement security and leaving them vulnerable to social mobility barriers where those at the bottom of the income distribution have a very low probability of reaching the top two tiers.
- Housing costs in the US will remain at record spreads between ownership and renting in the near term, while the cost of education has risen over 1,000 percent, far outpacing inflation.
- Student loan repayment challenges are acute, with defaults expected to surge from 5 million to a range of 10–15 million within three to six months; roughly 40% of borrowers are currently non-repaying and will face re-entry, while early withdrawals from 401(k)s may occur if repayment obligations suddenly rise to $200,000–$2,000 for those previously in forbearance.
- Student debt will heavily dictate financial behavior, influencing 85% of Gen Z and Millennial decisions and potentially preventing wealth transitions if public policy management fails, with women specifically at risk of stacking childcare and career debt immediately after loans due to caregiving responsibilities.
- Technological disruption from AI and robotics is imminent, with approximately 75% of employers planning implementation soon; while AI may perform 95% of certain white-collar tasks in minutes, reducing headcount in specific roles, three-quarters of employers acknowledge a shortfall in workforce development needed to manage this transition.
- Consumer behavior for younger generations will increasingly favor online apps and social media for financial advice, reflecting low trust in traditional institutions, while simultaneously demonstrating openness to non-traditional investments like crypto and real estate.
- Despite current debt burdens, Gen Z is expected to maintain strong work ethics through side hustles and will likely begin retirement saving earlier than previous generations, utilizing the time horizon for compounding to potentially pay off debt and save simultaneously.
- The ongoing Great Wealth Transfer will see assets move first to women due to longer life expectancy, who may then seek independent financial agencies over traditional advisors, while the industry must evolve to offer personalized, values-aligned investment solutions to meet these demands.