Generational Wealth Gap Explodes

by Alonzo on November 8, 2011

The wealth gap between the generations has exploded. Influenced by high college costs and a stagnate job market, today’s young adults are making little economic progress compared to previous generations

A report released by the Pew Research Center found that households headed by those 35 and younger realized a net worth of just $3,662, while those headed by adults 65 and over saw a net worth of over $170,494.

While it’s expected that older households accumulate more wealth than younger ones, the magnitude of difference in wealth was unexpected.

In 1984 households of those 65 and over enjoyed a net worth that was 10 times that of younger households. Yet, by 2009, the oldest adults were seeing a net worth that was 47 times the net worth of younger households.

Young adults have been caught up in a perfect economic storm. They face unprecedented unemployment while the recent housing crash has prevented them from building the home equity so important to wealth creation.

Younger adults are also waiting later to get married, a key component to building long term wealth. Perhaps most notable however, college debt hangs like a lead weight around the necks of many young adults. Total outstanding student debt will soon surpass $1 trillion dollars for the first time in US history.

Graph Source: Pew Research Center

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