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Mon November 7, 2011
Older adults are now 47 times richer than those under 35
Originally published on Mon November 7, 2011 6:10 am
There's been a huge increase in the wealth gap between older Americans and those just entering adulthood, according to a new analysis of Census Bureau data done by the Pew Research Center.
According to Pew's study:
In 2009, "households headed by adults ages 65 and older ... had 47 times as much net wealth as the typical household headed by someone" under 35 years of age. Pew says that "back in 1984, this had been a less lopsided 10-to-1 ratio."
The median net worth of a household headed by someone 65 or older was $170,494 in 2009, Pew says. That was up 42 percent from 1984, when the median net worth for that group was $120,457.
Meanwhile, the median net worth of a household headed by someone younger than 35 was $3,662 in 2009 — down 68 percent from $11,521 in 1984.
What's behind the divergence? Housing. "Rising home equity has been the linchpin of the higher wealth of older households in 2009 compared with their counterparts in 1984," Pew says. "Declining home equity has been one factor in the lower wealth held by young households in 2009 compared with their counterparts in 1984." Key to the trend: Many in the older group bought their homes at "pre-bubble" prices and are still enjoying gains despite the real estate market's recent troubles.
As The Atlantic Wire says, this news will certainly add fire to the sense among many younger adults that times are tougher for them than they were for many of their parents and grandparents.