- Americans above age 55 have seen an increase in wealth over time, while those younger than 55 have seen a decrease, according to data from a recent Federal Reserve report.
- This indicates that millennials and Gen X are financially lagging behind boomers as they age.
- The most extreme loss of wealth, however, has been among Gen X: The generation has seen its percentage of overall American wealth plummet from roughly 35% in the early 2000s to just above 20% in 2019.
- Younger people have barely seen an income increase since the 1970s; coupled with a rising cost of living, that makes it difficult to save and build wealth.
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Compared to boomers, Gen X and millennials have a lot of catching up to do wealth-wise.
That’s according to data from a recent Federal Reserve report. The chart below, which highlights the percentage of US wealth held by four different age groups, shows just how financially behind the young are: Their wealth levels are below where they should be.
Essentially, those above age 55 have seen an increase in wealth over time, while those younger than 55 have seen either a decrease in wealth or failure to accumulate more of it. That downward trend in wealth is notably centered around Gen X and millennials, who are between ages 39 to 54 and 23 to 38, respectively. Boomers are ages 55 to 73, according to Pew.
As shown in the chart above, wealth for those above age 70 has increased, but it’s not as steep as the increase in wealth for those in the 55 to 69 age group. This indicates that boomers are outpacing Silent Gen in wealth accumulation as they enter retirement.
A troubled financial outlook for Gen X and millennials
Meanwhile, wealth for those in the 40 to 54 age bracket and for those under age 40 has decreased.
Notably, the latter group – millennials – didn’t see as sharp of a decline in wealth as the former. Wealth levels also plateaued around the mid-2000s for millennials, which could be because they are younger and had less time to build wealth in the first place, while wealth for the 40 to 54 bracket continued to decrease. Gen X saw its overall share of American wealth plummet from roughly 35% in the early 2000s to 20% in 2019. Both trends indicate that millennials and Gen X are lagging behind boomers as they move into those age brackets.
That might be because younger people have barely seen an increase in income over time. Those between ages 25 and 34 have only seen an annual $US29 income increase since 1974 when adjusted for inflation, according to a SuperMoney report that analysed US Census Bureau data. That year, they were earning an average of $US35,426. By 2017, that jumped to a mere $US35,455.
Low income growth means less money to build wealth with, especially when incomes haven’t kept up with staggering increases in home prices and education, as the SuperMoney report found.
Both Gen X and millennials are feeling the effects of their money woes. In an Insider and Morning Consult survey, slightly more than 41% of Gen X rated their financial health as not very good or not good at all, and 37% of millennials said the same. And both generations, according to the survey, are equally stressed about money and aren’t saving for retirement.