Wealth
Charting The Growing Generational Wealth Gap
The Growing Generational Wealth Gap
As young generations usher into adulthood, they inevitably begin to accumulate and inherit wealth, a trend that has broadly remained consistent.
But what has changed recently is the rate of accumulation.
In the U.S., household wealth has traditionally seen a relatively even distribution across different age groups. However, over the last 30 years, the U.S. Federal Reserve shows that older generations have been amassing wealth at a far greater rate than their younger cohorts.
As the visual above shows, the older have been getting richer, and the younger have been starting further back than ever before.
By Generation: Baby Boomers Benefit & Millennials Lag
To examine the proportion of wealth each generation holds, it’s important to clearly define each age group. Though personal definitions might differ, the U.S. Federal Reserve uses a clear metric:
Generation | Birth Years | Age (2020) |
---|---|---|
Silent Generation & Earlier | 1945 and earlier | 75+ |
Baby Boomers | 1946–1964 | 56–74 |
Generation X | 1965–1980 | 40–55 |
Millennials | 1981–1996 | 24–39 |
Relative to younger generations growing up, the Silent Generation and Greatest Generation before them have seen a decreasing share of household wealth over the last 30 years.
However, the numerical levels have been relatively stable. For these combined generations, total wealth has gone from $16 trillion in 1989 to $19 trillion in 2019, with a peak of $27 trillion in 2007. Considering this cohort has understandably shrunk over time—from an estimated 47 million to 23 million in 2019—their individual shares of wealth have actually increased.
Immediately following are the Baby Boomers, who held more than half of U.S. household wealth towards the end of 2020. At $59 trillion, the generation holds more than ten times the amount held by a comparative number of Millennials.
Generation | Wealth (2019) | Population (2019) | Wealth/Person |
---|---|---|---|
Silent Generation & Older | $18.8 Trillion | 23.0 Million | $817,391 |
Baby Boomers | $59.4 Trillion | 71.2 Million | $834,270 |
Generation X | $28.6 Trillion | 65.0 Million | $440,000 |
Millennials | $5.0 Trillion | 72.6 Million | $68,871 |
With $29 trillion held in 2019, Generation X has also been gaining in wealth over the last 30 years. It’s good enough for five times the wealth of Millennials, though at just $440k/person, they’ve fallen far behind Baby Boomers in rate of growth.
Finally, trying to catch up to their older cohorts are Millennials, who held the least amount of household wealth ($5 trillion) for the greatest population (73 million) in 2019, an average of just under $69k/person.
For a direct comparison, it took Generation X nine years to climb from their start of 0.4% of household wealth in 1989 to above 5%, while Millennials still haven’t crossed that threshold. But it’s not all doom and gloom for Millennials. Their rate of growth is starting to rise, with the generation’s level of wealth climbing from $3 trillion in 2016 to $5 trillion in 2019.
By Age: A Growing Share for 55+
Though the generational picture is stark, the difference in U.S. household wealth by age makes the picture of shifting wealth even clearer.
Until 2001, the shares of household wealth held by different age groups were relatively stable. People aged 40-54 and 55-69 held around 35% each of household wealth, retirees aged 70+ hovered around 20%, and younger people aged under 40 held around 10%.
Since that time, however, the shift in wealth to older generations is clear. The 70+ age group has seen their share of wealth increase to 26%, while the share held by ages 55-69 has grown from 35% to almost half.
But not all ages are seeing an increasing slice of wealth. The 40-54 age group saw its share drop sharply from 36% to 22% between 2001 and 2016 before starting to recover towards the end of the decade, while the youngest cohort now hover around just 5%.
Breaking down that wealth by components is even more eye-opening. The 39 and under age group holds 37.9% of their assets in real estate, the largest share amongst any age group (and concentrated in the hands of fewer people) while older age groups have their wealth spread out across real estate, equities, and pensions.
Assets Held by Age (Percent of Total, 2020) | 70+ | 55–69 | 40–54 | ≤39 |
---|---|---|---|---|
Real estate | 21.6% | 20.5% | 27.6% | 37.9% |
Consumer durables | 3.8% | 3.6% | 5.2% | 9.4% |
Corporate equities and mutual fund shares | 24.6% | 23.1% | 18.6% | 8.1% |
Pension entitlements | 16.3% | 25.0% | 21.9% | 21.0% |
Private businesses | 7.9% | 9.7% | 12.1% | 8.1% |
Other assets | 25.8% | 18.1% | 14.7% | 15.5% |
But the difference is as much in assets as it is in opportunity. In 1989, Baby Boomers and Generation X under 40 accounted for 13% of household wealth, compared to just 5.9% for Millennials and Generation Z under 40 in 2020.
Will the Tide Turn for Generation Z?
As new and accumulated wealth has been built up in older generations, it’s a matter of time before the pendulum starts to swing the other way.
The Millennials age group are expected to inherit $68 trillion by 2030 from Baby Boomer parents. Of course, that payout isn’t going to be even across the board, with wealthier families retaining the bulk of wealth and the majority of Millennials laden with debt.
And with Generation Z (born 1997-2012) starting to come of age, the uneven playing field is making it hard to begin accumulating wealth in the first place.
Since it is in the best interest of societies to have wealthy generations that can drive economic growth, potential solutions are being examined all over the political sphere. They include different taxation schemes, changing estate laws, and potentially cancelling student debt.
Whatever ends up happening, it’s important to track how the distribution of wealth changes over the coming decade, and begin accumulating your personal wealth as best as you can.
Wealth
Mapped: Where Do the Wealthiest People in the World Live?
There are over 600,000 individuals worldwide with a net worth surpassing $30 million, representing the wealthiest people on the planet. Here’s where they live.
Where Do the Wealthiest People in the World Live?
This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.
Investors didn’t expect 2023 to be the bumper year for returns it ended up being. Despite tightening monetary policies and surging bond yields, equities continued their strong performance (helped hugely by enthusiasm around the potential of artificial intelligence).
This has boosted wealth creation, and the growth of ultra high net worth individuals (UHNWIs) in the world.
We map out where the 600,000+ UHNWIs reside, as of the end 2023. To be categorized as such, a person’s net worth needs to be higher than $30 million. This map uses data from the Knight Frank Wealth Report 2024.
It’s worth noting that some countries that are known hotspots for the wealthy—including Belgium, Saudi Arabia, the UAE, and Russia—do not have specified numbers in the source report and have not been covered in this map and article.
Ranked: Countries By Number of Ultra Wealthy Individuals
At the top of the ranks, accounting for more than one-third of the wealthiest in the world, the U.S. is home to 225,000 UHNWIs, more than double the number of 99,000 UHNWIs in China.
Together, the world’s two largest economies are home to 50% of the world’s wealthiest.
Rank | Territory | UHNWI Population | YoY Growth | % of World UHNWIs |
---|---|---|---|---|
1 | 🇺🇸 U.S. | 225,077 | +7.9% | 35.9% |
2 | 🇨🇳 China | 98,551 | +3.3% | 15.7% |
3 | 🇩🇪 Germany | 29,021 | +1.1% | 4.6% |
4 | 🇨🇦 Canada | 27,928 | +2.0% | 4.5% |
5 | 🇫🇷 France | 24,941 | +0.2% | 4.0% |
6 | 🇬🇧 UK | 23,072 | +3.1% | 3.7% |
7 | 🇯🇵 Japan | 21,710 | +0.3% | 3.5% |
8 | 🇮🇹 Italy | 15,952 | +3.8% | 2.5% |
9 | 🇦🇺 Australia | 15,347 | +2.9% | 2.4% |
10 | 🇨🇭 Switzerland | 14,734 | +5.2% | 2.4% |
11 | 🇮🇳 India | 13,263 | +6.1% | 2.1% |
12 | 🇪🇸 Spain | 10,149 | +1.7% | 1.6% |
13 | 🇳🇱 Netherlands | 8,390 | +0.2% | 1.3% |
14 | 🇹🇼 Taiwan | 7,640 | -0.3% | 1.2% |
15 | 🇰🇷 South Korea | 7,310 | +5.6% | 1.2% |
16 | 🇭🇰 Hong Kong | 5,957 | +2.5% | 1.0% |
17 | 🇸🇬 Singapore | 4,783 | +4.0% | 0.8% |
18 | 🇸🇪 Sweden | 4,125 | +2.5% | 0.7% |
19 | 🇳🇿 New Zealand | 2,587 | +2.9% | 0.4% |
20 | 🇳🇴 Norway | 2,276 | +1.1% | 0.4% |
21 | 🇦🇹 Austria | 2,167 | +0.3% | 0.3% |
22 | 🇹🇷 Türkiye | 1,932 | +9.7% | 0.3% |
23 | 🇮🇪 Ireland | 1,890 | +0.4% | 0.3% |
24 | 🇮🇩 Indonesia | 1,479 | +4.2% | 0.2% |
25 | 🇫🇮 Finland | 1,269 | +4.1% | 0.2% |
26 | 🇹🇭 Thailand | 889 | +0.8% | 0.1% |
27 | 🇿🇦 South Africa | 835 | -1.3% | 0.1% |
28 | 🇵🇹 Portugal | 800 | +3.0% | 0.1% |
29 | 🇲🇾 Malaysia | 754 | +4.3% | 0.1% |
30 | 🇻🇳 Vietnam | 752 | +2.4% | 0.1% |
N/A | 🌐 Other | 51,039 | +0.1% | 8.1% |
N/A | 🌍 World | 626,619 | +4.2% | N/A |
Note: The organization uses a dynamic proprietary wealth-sizing model created by their data engineering team to arrive at these figures. Exact numbers may change between different editions of this report.
Ranked third, Germany, has close to 30,000 UHNWIs, following the pattern of the biggest economic powerhouses having the highest share of the wealthy.
This correlation remains generally constant outside the top three as well, even if exact positions aren’t quite maintained:
- Canada, 10th largest economy, 4th in share of wealthiest people.
- Australia, 14th largest economy, 9th in wealthiest people.
- Switzerland, 20th largest economy, 10th in wealthiest people.
- India, 6th largest economy, 11th in wealthiest people.
Together, these top countries by share of UHNWIs account for 92% of all individuals with a net worth greater than $30 million.
Other countries, not specifically mentioned in the report, have 59,039 UHNWIs, or 8.1% of the world’s total.
Ranked: Regions By Number of Ultra Wealthy Individuals
Unsurprisingly, buoyed by the U.S. and China, North America and Asia are the top two regions by wealthiest individuals.
Europe is close behind Asia however; a reminder of the region’s collective economic might.
Rank | Region | UHNWI Population | YoY Growth |
---|---|---|---|
1 | North America | 253,066 | +7.2% |
2 | Asia | 165,442 | +2.6% |
3 | Europe | 155,232 | +1.8% |
4 | Middle East | 18,790 | +6.2% |
5 | Oceania | 17,934 | +2.9% |
6 | South America | 13,159 | -3.6% |
7 | Africa | 2,996 | +3.8% |
The oil-rich Middle East also outperforms on the wealthy individuals metric and saw the highest YoY growth in the ultra-wealthy after North America.
The world as a whole grew its UHNWI population by 4.2% and only South America saw a contraction in numbers between 2022 and 2023.
Where Does This Data Come From?
Source: Knight Frank Wealth Report 2024.
Note: Some countries that are known hotspots for the wealthy, including Belgium, Saudi Arabia, the UAE, and Russia have not been specified by the source report, and thus do not appear on this map.
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