Gen Z projected to be wealthiest generation by 2040

A new report from Bank of America predicts that Generation Z, born between 1997 and 2012, will become the largest and richest generation by 2040. They are expected to earn over $74 trillion in income during that time. Currently, Gen Z faces challenges such as high unemployment and a rising cost of living. Many have struggled to achieve traditional life goals, like buying a home. About 32% of Gen Z feel they are behind their parents financially. Despite these challenges, they tend to spend on experiences like travel and entertainment rather than saving. The labor market has been tough for Gen Z due to the aftereffects of the COVID-19 pandemic. Unemployment rates for Gen Z households increased by 32% in February compared to last year. Researchers classify them as "overeducated and underemployed," with more in college than previous generations at the same age. However, Gen Z is seeing high wage growth. They experienced an increase of nearly 8% in earnings this year, the highest among all generations. Additionally, they are poised to benefit from the transfer of wealth as Baby Boomers pass down their savings and assets. By 2023, Gen Z had $9 trillion in income. They are forecasted to reach $36 trillion in just five years and doubles that by 2040. Bank of America believes this generation will significantly influence economies and consumer habits. Uncertainties in the economy, particularly due to Donald Trump's policies, may bring short-term difficulties for Gen Z. A potential recession could lead to more job losses and higher unemployment.