It’s Good to Be an Owner
Every three years, the Federal Reserve releases its Survey of Consumer Finances (SCF), a deep dive into what American families earn, own and owe. The latest edition, covering 2022 through 2025, delivered a not-so-surprising headline: families headed by someone 75 or older are now the wealthiest age group in the country.
After adjusting for inflation, the median net worth of households 75 and older jumped 37 percent, to $504,900. Meanwhile, the youngest households, those under 35, saw their median net worth drop 23 percent, to $33,000. Every age group in between moved by 6 percent or less in either direction.
Before we start another round of generational finger-pointing, consider that the wealth gap may have more to do with owning assets than with age. Economic commentator Kyla Scanlon notes that “if you rent, your median net worth is about $10,000. If you own, it’s over $450,000.” And of course, after decades of working, many of those who are over the age of 75 own two valuable assets: their homes and their investments.
To put a finer point on the disparity, consider this: since 1990, after adjusting for inflation, the typical full-time worker’s weekly paycheck is up about 18 percent, home prices are up about 67 percent, and the S&P 500, with dividends reinvested, is up roughly 1,700 percent. The fact that older people tend to have more money invested than young ones, many of whom are relying on their paychecks to get their start, helps explain why the gap has gotten so wide.
One glimmer of potentially good news in the recent report is that over the past three years, wealth inequality appears little changed. Most of the blowout in the growth rate of wealth occurred from 1989 until 2013, according to Robert Armstrong of the Financial Times. He writes that during those years, “the richest tenth grew their real net worth much faster than everyone else. In the past 12 years, however, the growth gap with most other cohorts has either closed or disappeared, depending on how you cut the data.”
If you are younger and all of this bums you out, a little more good news: The under-35 group whose net worth fell between 2022 and 2025 had posted a big gain in the previous survey. Their median net worth more than doubled between 2019 and 2022, the biggest jump on record, likely due to pandemic stimulus checks, paused student loan payments and rising asset prices. Some giveback was inevitable, and even after the drop, young households are still wealthier than they were in 2019.
That doesn’t mean everyone is fine. The Fed survey found that the share of families behind on loan payments jumped from about 12 percent to nearly 20 percent, the highest since 2010. The mortgage payment on a median-priced home now eats up about a third of median family income, a record.
If you’re one of the lucky older folks who got richer, consider the advice Nick Maggiulli of Ritholtz Wealth Management offers: “give now, not later.” I love this idea because as long as the older generation has run the numbers and made sure that they have secured their own retirement, they can make a far greater impact by helping their 30 and 40 something children now than by leaving them money after they pass away.
For the younger folks, try to stay focused on your own journey and don’t compare yourself to your parents when they were your age or your friends, whose circumstances may be vastly different from your own. Track your spending, keep debt manageable, and contribute to your retirement plan, especially if there’s a match.