At the start of the pandemic, millennials and Generation Z adults held just under 5% of total U.S. wealth. By contrast, baby boomers and their parents dominated nearly three-quarters of it.
But now young adults are starting to rapidly close the gap. A new study on wealth inequality conducted by the New York Federal Reserve found that adults under the age of 40 have increased their wealth by a whopping 80% since 2019, far outpacing the financial growth of their elders.
“Real wealth increased for all three age groups since 2019,” the New York Fed researchers wrote, “but the change was most dramatic for young adults.”
Americans aged 55 and older – about the age of baby boomers – saw a 30% increase in wealth over the same time period. The wealth of people between the ages of 40 and 54, i.e. Generation X, saw their wealth grow less: by 10%.
Which generation increased their wealth the most?
While young people’s recent financial gains are undoubtedly good news, some key warnings about the New York Fed’s findings could sour the mood of Generation Z and millennials eager for a rare financial victory.
First, younger people – because they don’t have as much time as their elders to launch their careers, invest and grow their wealth – have lower net worths from the start. When viewed as a percentage, smaller numbers are, of course, more susceptible to larger swings in terms of percentage points.
In real dollar terms, young adults have increased their collective wealth by about $3.8 trillion since the pandemic began, while Americans age 55 and older have expanded their fortunes by $22 trillion , according to Money’s analysis of New York Fed data.
| Wealth increases with age Young adults have made significant progress but are still behind |
| Wealth in 2019 | % of US wealth in 2019 | Current wealth | % of current US wealth | |
| Ages 18-39 | $5 trillion | 4.9% | $8.9 trillion | 6.6% |
| Ages 40-54 | $25.5 trillion | 23.5% | $27.3 trillion | 20.5% |
| Age 55+ | 74.5 trillion dollars | 75.4% | $97.3 trillion | 72.9% |
Source: Money, New York Federal Reserve. Current wealth based on July 2023 data. Amounts are adjusted for inflation.
Another key point to consider is As that money was made.
For people under 40, net worth growth has largely been driven by the post-pandemic surge in stock markets. The researchers noted that people in this age group tend to have greater exposure to stocks (and therefore a riskier portfolio), which is why their net worth benefited disproportionately.
On the other hand, growing markets have indeed helped older Americans, but not to the same extent. What really drove the wealth gains for them was the considerable growth in real estate. According to the US Census Bureau, more than 3 in 4 Americans aged 55 and older own a home, and as home values have soared in recent years, this has given older Americans a major boost to their wealth net.
That said, the recent financial gains made by young adults have nevertheless resulted in a larger slice of the U.S. wealth pie, and that’s good news for them no matter which way you slice it.
“Faster growth in wealth among young adults,” the researcher wrote, “has led to limited reductions in age-based wealth disparities over the past four years.”
Now, according to Money’s analysis, they own about 7% of the national wealth.
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