The Graying of Wealth in America (75+, grandparent, moving, daycare)

[RationalExpectations]

According to the Federal Reserve’s Survey of Consumer Finances, wealth continues to shift to the nation’s seniors. Between 2013 and 2016, U.S. families’ wealth and incomes grew across the board as the economic recovery picked up steam—with most of these gains going to those aged 75+. This news comes atop 30 years of rapid wealth growth among older Americans, with the result that their net worth now towers over that of younger families. It’s a new reality that’s turning seniors into pillars of financial support for their children and grandchildren as well as changing public perceptions of old age.

The Fed numbers reflect broad-based gains that cut across the economic spectrum. In 2016, the median net worth of American households was $97,300, up 16% from 2013 after adjusting for inflation. Mean net worth also rose nearly 26% to $692,100. But the fruits of the recovery have been spread unevenly across different age groups. Faring the best were those 75+ — an age bracket largely occupied by the Silent Generation (born 1925 to 1942). This group experienced a 32% increase in median household net worth and a 60% increase in mean net worth. Today, the net worth of a typical retiree is $264,750. This amount shrinks moving down the age ladder: The Silent hold roughly 1.3 times the amount of wealth as Boomers, more than twice that of Xers, and 23 times that of Millennials.

[rjm1cc]

Remember this "wealth" may have to be spent each month for living expenses so they had to save money in their working years.

[ansible90]

This doesn't surprise me. The older you are, the more time you have had to save and invest. Anyone with money in stocks or property the past 10 years has most likely seen major increases in their investments. The younger boomers and GenX are still saving so they don't have as much yet. Millennials are just getting started and trying to save while raising families. Wouldn't expect them to have as much as a 75 year old.

[jertheber]

Those numbers look like what I see every day, the older folks in my neighborhood are doing quite well, beautiful homes, nice cars, world travelers, in general, they live an affluent lifestyle. Just the opposite of that is the norm in the new housing being built a few blocks from me. The new housing is occupied by millennials for the most part, the homes are very small and on impossibly small lots. Very few high end homes on private lots are being built in this explosion of home building, the common sight is the framing up of huge spec developments and lots of 600 sq foot apartments.

"Pillars of financial support:" Most of those I know in their late sixties and early seventies are definitely giving more to their children than any previous generation could ever afford, getting the kids through the last recession, enabling home buying, getting a good education, not to mention the travelling that some millenials are doing on the parent's dollar. All in all, not the world I grew up in, but my generation seems to be a whole lot better off than my folks or their parents were in their old age. I realize that the US has some dire poverty among the least well heeled of the older boomers, but they are definitely in the minority.

[engineman]

Accumulated wealth is not same as income. Our grandkids have higher incomes than we have. They have not been out in the real world long enough to build wealth.

Economic conditions were quite different 60 years ago when we were their age.

[TimAZ]

Our nation's economic well being relies on consumer spending to the tune of ~70% of GDP. Accumulated savings is a feature of the past (i.e. those gray old fogies), and younger people are expected to spend and consume. It’s their patriotic duty.

[numsgal]

The seniors may have wealth, but their overall net worth decreased:

Nearly all age groups experienced increases in median net worth between 2013 and 2016,
with the exception of families between ages 65 and 74, who experienced a modest decline.

[SunGrins]

Kind of a no brainer. If you account for debt-free homes in many cases with older people and staggering student loan balances with many younger people, you can begin to see how this shapes up. The empty nesters have an opportunity to accumulate some wealth. Younger generations, with kids in school or daycare do not have the same opportunities...yet. This pattern is probably true in other countries. The modern practice of having two income earners probably brought about a generational difference for some families. I can remember that my parents struggled when I was a kid but came through it and were reasonably comfortable when they were older and going into retirement. I only had one grandparent that I remember but I don't think she was all that well off as an elderly widow. (It seems people died younger back then -- she was 66 and my grandfather was 61.)

[Southern man]

The silent generation, (Me) experienced growing up without a lot. I experienced my old man retiring with a SS check of $400 monthly. I was impressed and decided I did not want to retire on just SS, so I saved, invested and did without. Now I am old, but relativity comfortable. I haven't done any thing that the current younger generations could not do. They just need a good dose of doing without everything for a while and learn to save.

[RationalExpectations]

"The largest gains in both median and mean net worth occurred among the oldest families,who experienced a 32 percent increase in median net worth anda 60 percent increase in mean net worth. "

"From 2013 to 2016, median and mean net worth increased for alltypes of householdsgrouped by educational attainment. The largest gains in median net worth occurred amongfamilies without a college degree, whose median net worth increased between 24 and29 percent. For mean net worth, the largest gains occurred among families without a highschool diploma, who experienced a 40 percent increase in mean net worth."