Wealth Gap Between Generations Widens
August 13, 2019
It makes sense that these would always be a gap in the wealth between generations, but in comparing baby boomers and millennials, that gap has grown to a canyon. Magnify Money’s analysis of Fed data shows how the generational wealth gap today compares to that of previous cohorts.
In 1998, the average household aged 52 to 75 had about 7 times as much wealth as a household aged 20 to 35. Today, the older generation has nearly 12 times as much wealth. Whereas the older cohort’s average household wealth grew from $747,600 to $1.2 million in the intervening twenty years, the younger group has seen their wealth contract. The average 20 to 35-year old had $103,400 in 1998. Today they have just $100,800.
The primary causes are an increase in housing costs, both for renters and homeowners, and a massive student loan burden. Living through the Great Recession has also made millennials more reticent to invest in the stock market, limiting their wealth growth.