The Demographics of Wealth
How Age, Education and Race Separate Thrivers from Strugglers in Today's Economy
Essay No. 3: Age, Birth Year and Wealth
Although there may be downsides to old age, those 62 and older can take heart in knowing that the odds are in favor of their being wealthier than younger people. And the gap has widened considerably over the past quarter-century—in favor of old people. That said, being old isn’t what it used to be. Baby boomers, who are now retiring in droves, are likely to be less well-off than their “old” counterparts in the two previous generations. And it looks as if members of the next two generations — Generation X and Generation Y (the millennials) — might also end up less wealthy than the generation before them.
These are just some of the connections between age and wealth that were found in researching this essay—the third—in our “Demographics of Wealth” series. (The first looked at the link between race/ethnicity and wealth. The second examined the connection between education and wealth.) All of the essays are the result of our analysis of data collected between 1989 and 2013 by the Federal Reserve for its Survey of Consumer Finances. More than 40,000 families were interviewed by the Fed over those years.
For this essay, we looked at age in two ways: where a person stands in the life cycle (young, middle-aged or old) and how birth-year cohorts stack up against one another. This latter approach allows us to make some comparisons of generations, from “the greatest generation” of WWII fame to the millennials of today.
Among our findings: