NEW YORK, July 8 (Xinhua) -- Americans aged 55 and over control nearly 70 percent of U.S. household wealth, a sharp rise of over 50 percent in 1989, the first year of available data, according to the Federal Reserve. Meanwhile, their dollars amount to 45 percent of U.S. personal spending, up from 29 percent three decades ago, according to Moody's Analytics.
"Older Americans are emerging as major drivers of the economy. Their stock portfolios, retirement savings and paid-off homes have swelled in value over decades of growth. Hours once spent raising young children and working can now be devoted to golf, concerts and brunch," The Wall Street Journal reported on this subject last weekend.
As of April 2024, the median net worth for Americans aged 75 and older was 254,800 U.S. dollars, more than double the median net worth of the general population, which is 121,700 dollars. According to Fed data, the median net worth peaks between the ages of 65 and 74 and then decreases as people enter their late seventies and beyond.
In particular, during the pandemic, the wealth of older Americans increased significantly as home and stock values rose. According to the Federal Reserve Bank of St. Louis, the median net worth for households headed by someone 65 or older increased by about 91,000 dollars between 2019 and 2022.
U.S. seniors typically have more wealth than younger people, but the more significant gains for older Americans in the last few years have made that disparity "starker," according to a paper co-authored by Lowell Ricketts, a data scientist at the St. Louis Fed's Institute for Economic Equity, in March this year.
Wealthy people are always served better. A case in point is the real estate sector. More developers are catering to active boomer buyers because they have ample cash in purse. Earlier this year, U.S. mega-builder PulteGroup cited the "active adult" as among its best revenue producers. More developers are including the so-called "age-restricted or age-targeted section" in their projects.
"Age-restricted homes are clustered in planned communities throughout the U.S., particularly in the South and West," noted the Journal in its report titled "Baby Boomers' Good Times Drive the Economy."
According to Fed data at the end of 2023, older baby boomers in the United States have accumulated more than 14 trillion dollars in additional net worth since the end of 2019. Their share of the country's wealth jumped to a record 30 percent, even though they accounted for 11 percent of the population.
There were about 2.3 million more people over 70 in the country in 2023 than in 2019. "One major driver was the surge in home values and stocks during the pandemic, which benefited older generations most likely to own a house -- or two -- and hold equities or mutual funds," said Bloomberg in its report about the data.
"Looking at a longer period, the sharp increase in wealth for older people is even more pronounced," it said. "In 25 years, the aggregate wealth of Americans aged 70 and older has risen six-fold to 43.3 billion dollars. Over the same time period, the wealth of those under age 55 rose by about 2.5 times."
It noted that older Americans have been the beneficiaries of good timing with the stock market. Since 2019, those aged 70 and older have collectively gained about 5 trillion dollars in equity gains. Close to 38 percent of the nation's corporate equities and mutual fund shares were held by people in that age group in the third quarter of 2023, the highest share on record in data going back to 1989. ■
