Baby boomers are collectively ten times wealthier than millennials
A new study by Self Financial reveals that today’s 40-year-olds own half the wealth of older generations when they were the same age. View the full study here.
In the U.S., household wealth has traditionally seen a relatively even distribution across different age groups. However, over the last 30 years, data from the U.S. Federal Reserve shows that older generations have been amassing wealth at a far greater rate than their younger cohorts.
In 2021, the average net worth in an American household aged 64-75 reached over $1.2m, while the average household under 35 had a net worth of just $76k.
In 1998, the American population under 40 years held 13.1% of America’s total wealth. Today, those under 40 hold only 6% of the total wealth. This means that millennials and Generation X own less than half of the wealth that older generations owned when they were the same age.
In 2021, the vast majority of the country’s wealth (78.1%) belonged to the older generations with baby boomers owning a whopping 52.2% of the country’s wealth, while the silent generation owned 15.2%.
Generation X (aged between 41 and 56 years) owns 27.6% of the country’s total wealth, while millennials (25-40 years) only possess 5% of the country’s total wealth. Hence, as a group, baby boomers are more than 10 times more wealthy than millennials.
How Much Real Estate Does Each Generation Own?
In 2021, the baby boomer generation owned 44.1% of all real estate in the U.S. GenX owned 31.2%, millennials 11.2% and the silent generation 13.6%.
Back in 1996, when the baby boomers were the same age as Generation X are today, they owned 41.6% of the real estate in the U.S. This is 33% more than Generation X owns in real estate today.
What Baby Boomers Own
While baby boomers own the largest chunk of real estate compared to other generations, this is not where most of their wealth is held. Out of the baby boomers’ total wealth, 20.6% is in real estate. The largest portion (28.3%) comes from corporate equities and mutual fund shares followed by pension entitlements at 21.2%.
Other assets account for 17.8% of their wealth, while private businesses and consumer durables account for 8.7% and 3.4% respectively.
What Millennials Own
Although millennials only possess 11.2% of the nation’s total wealth relating to real estate, this is where most of their money (34.1%) is held.
Pension entitlements account for 21.8% of the millennials’ wealth, 18.1% are tied up in other assets, 9.7% in consumer durables, 8.3% in private businesses and 8% in corporate equities and mutual funds.
The Value of Assets: Baby Boomers Versus Millennials
A closer look into the assets owned by baby boomers and millennials reveals that there’s a significant difference in the value of the assets owned.
The value of the total real estate owned by baby boomers is worth $14.87 trillion. The real estate owned by millennials is worth a quarter of that at $3.79 trillion.
The difference in value of the corporate equities and mutual fund shares is even greater between the two generational groups; baby boomers own equities and funds to a total value of $20.3 trillion. millennials, on the other hand, only own $0.88 trillion in equities and funds, meaning that baby boomers own 96% more in funds and equities than millennials.
Pension entitlements owned by baby boomers are worth $15.44 trillion compared to $2.41 trillion owned by millennials. Baby boomers’ private businesses are worth $6.26 trillion, while millennials’ private businesses are worth just 15% of that at $0.94 trillion.
Consumer durables owned by baby boomers are worth $2.41 trillion, while the consumer durables owned by millennials stack up to a value of $1.05 trillion.
Other assets owned by baby boomers are worth a total of $12.23 trillion, while millennials own $1.95 trillion worth of other assets.
Average Wealth Per Generation Over Time
The average wealth per generation fluctuates over time. To get as accurate a view as possible over the historical net worth across different generations, Self have taken inflation rates in mind.
30 years of age
Comparing Generation X and millennials, the report showed that millennials are 23.7% worse off than Generation X in terms of wealth accumulated around the same age. By the time Generation X was in their 30s, they had an average wealth of $84,414 (inflation rates taken into consideration), while millennials had an average wealth of $64,412.
The average baby boomer had a wealth of $132,960 in their 30s, more than double the wealth of millennials around the same age.
40 years of age
When baby boomers were in their 40s, they had an average wealth of $195,994. Generation X in their 40s, had accumulated a wealth of $131,021 around the same age.
50 years of age
When the youngest of the silent generation reached their 50s in 1996, their average wealth was $292,210. Using historical inflation rates, that number is equivalent to a wealth of $495,057 in today’s value.
Baby boomers held an average wealth of $629,683 in their 50s, equivalent to $704,158 in today’s value.
Worse off is Generation X who, on average, owned $396,293 when they started reaching their 50s. This is 43.73% less than what Boomers had when they were the same age.
Lauren Bringle, Accredited Financial Counselor®, at Self Financial comments:
“The generational wealth data certainly confirms what many people have been suspecting, and that is previous generations had it easier financially with more wealth at comparable ages. In particular, baby boomers had approximately double the wealth of today’s millennials, and the situation looks even bleaker for those in Generation Z and younger”.
“However, that doesn’t mean there aren’t things younger generations can do in order to achieve more financial stability. Saving money, starting in even small amounts, can not only start to add up but it impacts things like your credit score, which can have a huge impact on month to month costs. We also know, through our own research, that it takes the average couple just over 12 months on average to save for a down-payment on the average FTB property, and with inflation at 30 year highs and asset prices rising, having goals like that can really set younger generations up for a more stable future.”
Methodology
Self Financial analyzed population data and wealth data for the silent generation, baby boomers, Generation X and millennials from the Census (www.census.gov) and the Federal Reserve (www.federalreserve.gov). At the time the research was carried out, no data was available for Generation Z.
The inflation rates were calculated using SmartAsset’s inflation calculator (https://smartasset.com/investing/inflation-calculator)
*Data was collated and analyzed between October and November 2021, using the latest sources available
About Self Financial
Self Financial (https://www.self.inc/) is a fintech company based in Austin, Texas, dedicated to helping people build credit and save money with a range of financial products.
