Older people have more money than younger people

Posted by Jim Stroud

July 8, 2007

According to USA Today, “The median net worth of people 55 to 64 has climbed to nearly $250,000, while it has dropped to about $50,000 for those in their late 30s.”

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Prashant Tungare arrived in the USA in 1984 with a wife, a child and $500 in his pocket. Today, the India-born American citizen is a prosperous computer specialist at Wachovia Bank.

“I’ve lived the American dream,” says Tungare, 55. He owns a 3,000-square-foot house in Charlotte and has enough money to retire, but he loves his job too much to quit.

Tungare is part of the wealthiest generation in American history — a group of 67 million people 55 and older who are so affluent that the gap between them and younger people increasingly is making the USA a nation of haves and haves-much-less.

The growing divide between the rich and poor in America is more generation gap than class conflict, according to a USA TODAY analysis of federal government data. The rich are getting richer, but what’s received little attention is who these rich people are. Overwhelmingly, they’re older folks.

Nearly all additional wealth created in the USA since 1989 has gone to people 55 and older, according to Federal Reserve data. Wealth has doubled since 1989 in households headed by older Americans.

Not so for younger Americans. Households headed by people in their 20s, 30s and 40s have barely kept up with inflation or have fallen behind since 1989. People 35 to 50 actually have lost wealth since 1989 after adjusting for inflation, Fed data show.

Older people have always been wealthier than younger ones. What’s changed is the disparity between the generations. Old people have been racing ahead, helped by government retirement benefits. Young people are running in place, partly because they’re delaying careers to get more education.

READ: Generation gap? About $200,000