Guess which half of America holds 89% of the wealth
To paraphrase the late jazz musician Mose Allison, young Americans these days have nothing in the world.
Americans 45 and under control just 11 percent of the nation’s wealth, study finds Household data from the Federal Reserve.
In other words, nine-tenths of America’s assets belong to America’s older half. People aged 45 and over make up approximately 42% of the country’s population and approximately 54% of adults.
Boomers born between 1946 and 1964 hold 51% of American wealth: a mountain of real estate, stocks, pensions, private companies and other assets worth a combined $90 trillion by late 2025.
Generation X, born between 1965 and 1980, owns 26% of the $46 trillion worth of wealth.
A dwindling group of Americans over the age of 80 holds 12% of American wealth, worth $21 trillion.
The remaining American wealth, worth about $19 trillion, belongs to everyone else: Millennials born between 1981 and 1996 and the oldest members of Generation Z born in 1997 or later.
Older Americans Are Richer Than Ever
Older Americans are richer than ever and getting richer. The average 50-something is worth $1.4 million Predictions from Empower. The average 60-something is worth $1.6 million.
In comparison, an average 20′ is worth $139,243, while an average 30′ is worth $325,952.
The pattern seems clear: Age begets wealth.
Boomers, the wealthiest generation, control $31 trillion in stocks and mutual funds. According to the Fed. They own $19 trillion in real estate. The collective value of these assets has ballooned over time, thanks to the rising stock market, rising home values, and stable home equity accumulation.
The concentration of wealth among the elderly is to some extent related to the passage of time.
“Building wealth is like a snowball rolling down hill,” he said Richard Frysenior fellow at Pew Research Center. “It takes time to turn into a bigger snowball.”
If you consistently save for retirement and invest in stocks and bonds throughout your career, the value of your account is likely to increase geometrically.
The average Vanguard retirement account balance for Americans over 65 is $299,442 in 2024, the company announced. reports. The average balance for savers ages 25 to 34 was just $42,640.
If you buy a home and take out a 30-year mortgage, your home’s equity will increase steadily over time due to both your payments and the increasing value of the property.
“These are things that accumulate over the life cycle,” he said John SabelhausSenior fellow in economic studies at the Urban-Brookings Tax Policy Center.
The economics of wealth creation are changing
But the economics of wealth are changing in ways that make it harder for young Americans to build it.
The typical first-time homebuyer is now 40, a record number, according to the study. National Association of Realtors. The average age of all home buyers is 59.
“If you live in an affluent part of the country, which is pretty much everywhere now, and even if you have significant assets, even a very high income is not enough to buy a home,” he said. Dinon HughesThe 25-year-old is a certified financial planner in Portsmouth, New Hampshire.
American workers are expected to build retirement savings over their careers; It’s a model designed to concentrate wealth among the elderly. Previous generations relied more on workplace pensions.
Retirees are living longer, which means their heirs must wait longer to inherit wealth. Americans are most likely to inherit between ages 56 and 65, according to a 2021 analysis from the Wharton School of the University of Pennsylvania.
“I have a group of clients whose parents have passed away, but most are in their 60s,” he said. Laurie Allen43, is a certified financial planner in Hermosa Beach, California.
It is difficult to compare different generations over time. But it’s clear that Boomers controlled more of America’s wealth during their (relative) youth than Millennials and Zoomers do today.
In 1991, the year the oldest generation turned 45, the younger half of America held about 23% of all wealth, according to Fry at Brookings.
(The hard part: Boomers made up a larger share of the population in 1991 than millennials do now.)
Will Generation Y and Generation Z ever catch up?
The good news for millennials and Gen Zers is that many encouraging signs suggest they will have plenty of wealth in the years to come.
Millennials ‘will inherit more than boomers did from their parents,’ he said Wayne Wine GardenSenior fellow in economics at the Pacific Research Institute. But they may not see that money for another 20-30 years.
Some recent reports suggest that millennials are building wealth faster than older generations and that they have more wealth than older generations checking in at the same age.
Generation Z and Generation Y in general I started saving for retirement earlier More so than Generation X or Boomers, and they are avid savers.
The overall 401(k) savings rate for Gen Z workers is 11.3%, not far behind the savings rates of Millennials (13.5%) and Gen X (15.4%), Fidelity reports. The savings rate of young adults is important because Generation Z is decades away from retirement.
“We all realize we need to put aside money for our own retirement, and everyone is reaping the benefits,” said Hughes, a Gen Z financial planner.
Between retirement savings, eventual homeownership and inheritance, millennials and Zoomers will eventually accumulate tremendous wealth, researchers say. But it will take time.
“They’re young. They haven’t had much time to save yet,” Pew’s Fry said. “This is the magic of combining. Combining is also magic, but its magic takes decades to work.”
This article first appeared on USA TODAY: This half of America owns 89% of the country’s wealth
