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Mellody Hobson talks about young people and wealth on today’s “Money Mondays” segment.

I hate to be the bearer of bad news, but the Urban Institute just released a new study about wealth building and younger generations, and the findings show that Gen X and Gen Y Americans have accumulated 7% less wealth than their parents did at that age over 25 years ago.

Hasn’t the average wealth of Americans doubled over that same period of time?

That’s true, and the American dream of working hard, building wealth, and saving more than one’s parents has held true…unless you’re under 40. It makes sense if you remember that wealth compounds over long periods of time, which is where young people are at a relative disadvantage. Less time saving means less compounding, and a lower bottom line.

But how do you account for the discrepancy that their parents had saved more by the same age?

It’s a number of factors that are greatly out of the individual’s control: Stagnant wages, fewer job opportunities and lowered home values among them.

First, let’s take a look at the job market, which has been particularly harsh for young people over the past five years. The unemployment rate is 7.8 percent for workers between the ages of 25 and 34; it hovered over 10 percent for more than a year during the recession and early stages of the recovery. By contrast, for workers between the ages of 45 and 54, the unemployment rate is 5.5 percent, and it peaked at 8 percent in 2010. If you don’t have a job, you can’t save any money.

Next, let’s look at housing. When the housing market crashed, homeowners who owed the most on their mortgages relative to their home values were hit the hardest, and this group was mostly people in their 20s and 30s. These young adults now find themselves locked out of the housing market, because although prices have fallen sharply and interest rates are remarkably low, the credit standards are a lot tougher.

Soaring student loan debt is another factor. A study of Federal Reserve data by the Pew Research Center found that 40 percent of relatively young households had outstanding student debt as of 2010, up from 34 percent in 2007. The median balance among all households with student loan debt was more than $13,000. These debts could take years to pay down.

All of these factors spell economic hardship for young people, and they’re struggling just to pay the bills—saving isn’t a priority.

So what’s your advice to young people about how to get on track to save more and work towards a secure retirement?

Honestly, I wish I had more answers. First, I would remind young people that it’s not their fault. The older generation can have the habit of blaming young people’s economic hardships on poor saving and spending habits, but that’s really not the case here. The scholars at the Urban Institute scholars suggested a number of new government policies to help address the problem. First, they suggested encouraging retirement accounts by making them automatic unless an employee opted out. They also proposed modifying the home mortgage interest deduction to push more money toward homeownership for lower-income workers. In addition to being a staple of the American dream, homeownership can be a primary vehicle for building wealth. The study found that if a person delayed the purchase of a home to age 40 instead of buying at age 30, it could result in a $42,000 loss in home equity by the time she reaches 60, given trends in wealth accumulation over the past few decades. The bottom line is that the onus is on all of us to help young people get on track to build their nest eggs for retirement, or it will be on all of us to bail them out down the road.

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