The Real Reason Black Baby Boomers Are Winning Financially While Their Children Struggle

Black families have always done their best to make sure the future better for the next generation, and in some ways, things have improved. More African Americans are graduating from college than they did 50 years ago and we have seen a rise in the average income between 1971 and 2015. 

But now, those positive trends seem to be taking a downward turn as Gen X (people born between 1965 and 1980) and Millennials (those born between 1981 and 1996) are finding themselves in worse financial shape than Baby Boomers, the generation of Americans born between 1946 and 1964.

From rising housing costs to an economy that wasn’t always on their side, we’re looking at why the children and grandchildren of Baby Boomers aren’t as rich.

It’s the Economy

One of the reasons so many Black Baby Boomers were able to grab their piece of the American dream was because the economic conditions were on their side. Between 1983 and 1989, the country experienced an economic boom due to tax cuts and deregulation in business.

By contrast, many in Black Gen X faced unemployment early in their careers in the wake of the 2007 to 2009 recession. During that time, the unemployment rate went from 5 percent in December 2007 to 10 percent in October 2009, according to the Bureau of Labor Statistics.

Debt is On the Rise

Younger Black Americans are finding it increasingly difficult to save money, as a rise in their household debt is eating up a big chunk of their income.

By the time they turned 30, the average household debt for Gen X was $86,606 almost twice as much as Baby Boomers, who had an average debt of $46,230 at the same time in their life, according to the Federal Reserve Bank of St. Louis.

A big chunk of that debt is coming from student loans, as more Gen X and Millennials took out loans to pay for college. According to a study from the Employee Research Benefit Institute, over 50 percent of Black Millennials reported having student loan debt, compared with nearly 45 percent of White Millennials and 27 percent of Black Gen X.

Rising Housing Costs

Much of the wealth held by Black Baby Boomers comes from the equity in the homes they own. But while there is clear racial disparity in homeownership stats, there is also a generational difference. According to Redfin, 60 percent of Black Baby Boomers own their homes. The percentage decreases with each following generation, with just over 50 percent of Black Gen X and 33 percent of Black Millennials owning their homes.

The fact that homeownership is less attainable for younger Black Americans can be linked to the rising housing costs across the country.

In the last quarter of 2023, the average sale price of homes in the United States was $492,300, according to data from the U.S. Department of Housing and Urban Development. In 1993, the average price was $148,300, and if you go back to 1983, the price is $90,800.

Planning For Retirement Looks Different

Now that the youngest Baby Boomers are entering their sixties, many of them are enjoying retirement, thanks to pension plans offered to them by their employers. Those employer-sponsored retirement plans give guaranteed monthly checks for life to employees after they retire.

But in the 1980s, many companies began shifting away from pensions to 401(k) plans, which depend on the employee to voluntarily contribute a portion of their paychecks pre-tax which is invested in things like mutual funds, money market funds and stocks. The employer has the option to provide a matching contribution.