Wealth Gap Between Young and Old Americans Is Widest Ever
A new analysis of census data by the Pew Research Center is showing that the wealth gap between Americans 35 and under and those 65 and over is more disparate than it has ever been. This doesn’t necessarily mean that your grandparents are rolling in the dough while you’re struggling to make rent but it does mean that our troubled economy has made it harder for younger Americans to amass wealth the way that generations ahead of us have.
Old folks are typically more wealthy than their younger counterparts simply because they’ve been alive longer. They’ve worked longer and thus have had more time to save earn money, pay off debt and attain assets. However, what is cause for concern is the growing size of this gap.
In 1984 older Americans had ten times the wealth of younger Americans but in 2009 that 10:1 ratio has become closer to 50:1 with the 65 and over set being worth 47 times more than their kids and grandchildren. While the median net worth (assets minus debt) of households headed by people over 65 has increased 42% from 1984 to 2009 households headed by those 35 and under have seen their net worth plummet 68% when similarly compared to 25 years ago.
The Pew Center points to a few specific reasons for the disparity, citing housing as the main factor. Much of any household’s wealth is tied to the value of the home it owns. While home equity has risen for older folks who purchased their property before the housing bubble burst younger homeowners, who bought during or after it, have seen sharp declines in the value of homes they paid too much for in the first place. Factor in the dismal job market coupled with mounting student loan debt and you have the recipe for a generation that will encounter much more difficulty accumulating wealth than its predecessors.
How do you feel about these facts? Given the way things are going economically and in your life do you think that this gap will get smaller? Do you think you think you’ll be worse of than your grandparents and parents once you hit retirement age? Let us know in the comments below or go to our Facebook page and take out poll.