Despite their moniker, “baby” boomers account for an oversize amount of America’s riches, having become somewhat of a Monopoly man.
The wallets of the oldest boomers (those over 70, a group that also includes members of the Silent Generation) are looking pretty plump post-pandemic. New Federal Reserve data shows that the cohort has become $14 trillion richer since 2019 came to a close. These seniors might be a David-size representative of the population at 11%, but they make up a Goliath-size footprint in our economy, holding 30% of the country’s wealth—a record, Bloomberg reports.
That’s equivalent to $43.3 billion, six times what it was 25 years ago. The total wealth for those under 55 pales in comparison, only 2.5 times bigger during the same time frame.
What’s more: As the share of the country’s household wealth for the 70-plus age group rose during the pandemic, it declined for those ages 40 to 59 (mainly Gen Xers and younger boomers)—it’s now smaller than it was in 2019. Somewhat surprisingly, it increased slightly before leveling off in 2022 for the under-40 age group—the stereotypical economically challenged millennials and their Gen Z successors. While their share is slightly higher than what it was in 2019, it’s still half of what it was for this group in 1989—when older boomers were their age.
The fact that such a small group of individuals makes up such a pronounced amount of economic power exposes the overwhelming wealth disparity that has grown during the pandemic, especially during a year where Americans feel an overwhelming sense of fatigue from a volatile economy and persistent (though cooling) inflation. It’s also indicative of the strong leg up boomers had in their wealth building journey, which other generations weren’t lucky enough to have.
While most of today’s youth speaks of an economy marked by working paycheck to paycheck, some boomers have escaped its claws. For one thing, their age means they’ve simply had more time to build wealth. But that was a lot easier to do when they grew up in an economy prime for investing in stocks and real estate, which ultimately paid off during the pandemic. And this group isn’t just living longer, they’re also working longer and continuing to bring home the bread, partly to sustain their nest egg and remain competitive during a a high cost-of-living era.
The kids might not be all right, but elder boomers mostly are
While older boomers have weathered their own economic turmoil, like the Great Inflation of the 1970s, the economy set them up pretty nicely for wealth accumulation. They were the biggest beneficiary of a $129 trillion “massive wealth transfer” from the government over the past 40 years, according to a Bank of America Research note led by Ohsung Kwon.
Just over a quarter of that wealth is tied up in financial assets like real estate. Boomers entered the housing market at a more opportune time than younger generations, thanks to a low 3% mortgage rate. When the pandemic rolled around, the houses they bought soared in value amid an overpriced housing market; some boomers sold for a huge profit and bought another house, edging out first-time homebuyers with all-cash offers.
Separate Fed data, cited by Bloomberg, also shows that older boomers have accumulated $5 trillion since 2019 in equity. Sixty-three percent of Americans over age 65 have money in stocks, a Gallup poll from April finds. And they won’t have to pay for the environmental damage caused by the carbon emission-releasing companies they invested in, per a 2020 Deutsche Bank report. The same reports finds they also spent less on education than millennials, who are dealing with staggering student debt.
No wonder most millennials and Gen Zers feel concerned about boomers’ influence on their financial future, per a survey by OnePoll on behalf of National Debt Relief. Boomers, after all, have borne the brunt of backlash for leaving millennials with a broken economy.
Of course, not all boomers are faring well. As with any generation, there’s an intergenerational wealth gap; many boomers are still living in poverty as they struggle to stay afloat during a time when $1 million is no longer enough to comfortably retire on. And even though many have seen stock market gains, having assets tied up in the market has also left many more exposed to downturn.
That’s prompting some to unretire or delay retirement. The share of Americans 65 and older who are still employed has almost doubled since 35 years ago, reaching almost 20% of the cohort, per new Pew Research Center data. It found that they are earning more than previous generations at their age, helping to grow their wealth. Still, though, there are 2 million more retirees than expected after an early pandemic exodus from the workforce.
But the cohort is simply so big and our nation’s retirement system remains woefully ill-equipped to deal with their exit. Whether it be from the workforce or the world, aging elder boomers could leave a massive ripple effect when they depart. They’re worth almost a third of the wealth, after all.
