Personal Finance
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 | 1946โ1964 | 56โ74 |
Generation X | 1965โ1980 | 40โ55 |
Millennials | 1981โ1996 | 24โ39 |
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 timeโfrom an estimated 47 million to 23 million in 2019โtheir 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. Itโs good enough for five times the wealth of Millennials, though at just $440k/person, theyโve 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 havenโt crossed that threshold. But itโs not all doom and gloom for Millennials. Their rate of growth is starting to rise, with the generationโs 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+ | 55โ69 | 40โ54 | โค39 |
---|---|---|---|---|
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, itโs 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 isnโt 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, itโs important to track how the distribution of wealth changes over the coming decade, and begin accumulating your personal wealth as best as you can.
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Personal Finance
Mapped: Personal Finance Education Requirements, by State
Only 22.7% of U.S. students are required to take a personal finance course. Which states have the highest levels of personal finance education?

The Percentage of Students Receiving Personal Finance Education
When you graduated from high school, did you know how to create a budget? Did you have an understanding of what stocks and bonds were? Did you know how to do your own taxes?
For many Americans, the answer to these questions is probably a โnoโ. Only 22.7% of U.S. high school students are guaranteed to receive a personal finance education. While this is up from 16.4% in 2018, this still represents a small fraction of students.
This graphic uses data from Next Gen Personal Finance (NGPF) to show the percentage of high school students required to take a personal finance course by state.
A Closer Look at State-level Personal Finance Education
A standalone personal finance course was defined as a course that was at least one semester, which is equivalent to 60 consecutive instructional hours. Hereโs the percentage of students in each state who have a required (not optional) personal finance course.
State/Territory | % of Students Required to Take Personal Finance Course |
---|---|
Mississippi | 100.0% |
Missouri | 100.0% |
Virginia | 100.0% |
Tennessee | 99.7% |
Alabama | 99.6% |
Utah | 99.6% |
Iowa | 91.3% |
North Carolina | 89.2% |
Oklahoma | 47.1% |
New Jersey | 43.0% |
Nebraska | 42.8% |
Kansas | 40.8% |
Wyoming | 38.3% |
Arkansas | 34.6% |
Wisconsin | 33.5% |
South Dakota | 27.1% |
Ohio | 23.5% |
Pennsylvania | 16.2% |
Maine | 15.6% |
Rhode Island | 14.8% |
Connecticut | 14.7% |
Illinois | 13.9% |
Maryland | 12.5% |
North Dakota | 12.2% |
Vermont | 12.1% |
Nevada | 11.0% |
Indiana | 10.9% |
Oregon | 7.5% |
Minnesota | 6.9% |
Montana | 6.9% |
New Hampshire | 6.0% |
Kentucky | 5.5% |
Colorado | 5.4% |
Delaware | 5.0% |
Massachusetts | 5.0% |
West Virginia | 3.2% |
Louisiana | 2.7% |
Washington | 2.4% |
Texas | 2.2% |
New York | 2.0% |
Michigan | 1.7% |
Idaho | 1.4% |
Arizona | 1.0% |
California | 0.8% |
South Carolina | 0.8% |
Alaska | 0.6% |
Florida | 0.4% |
New Mexico | 0.4% |
Georgia | 0.0% |
Hawaii | 0.0% |
Washington, D.C. | 0.0% |
Eight states currently have state-wide requirements for a personal finance course: Alabama, Mississippi, Missouri, Iowa, North Carolina, Tennessee, Utah, and Virginia. Naturally, the level of personal finance education is highest in these states.
Five states have begun the process of implementing a requirement, with Florida being the most populous state yet to guarantee personal finance education for high schoolers. The state previously required schools to offer a personal finance course as an elective, but only 5% of students took the course.
Outside of the guarantee states, only 9.3% of students are required to take a personal finance course. That number drops to 5% for schools that have a high percentage of Black or Brown students, while students eligible for a free or reduced lunch program (i.e. lower income students) also hover at the 5% number.
Why is Personal Financial Education Important?
The majority of Americans believe parents are responsible for teaching their children about personal finance. However, nearly a third of parents say they never talk to their children about finances. Personal finance education at school is one way to help fill that gap.
People who have received a financial education tend to have a higher level of financial literacy. In turn, this can lead to people being less likely to face financial difficulties.
People with low levels of financial literacy were five times more likely to be unable to cover one month of living expenses, when compared to people with high financial literacy. Separate research has found that implementing a state mandate for personal finance education led to improved credit scores and reduced delinquency rates.
Not only that, financial education can play a key role in building wealth. One survey found that only one-third of millionaires averaged a six-figure income over the course of their career. Instead of relying on high salaries, the success of most millionaires came from employing basic personal finance principles: investing early and consistently, avoiding credit card debt, and spending carefully using tools like budgets and coupons.
Expanding Access to Financial Education
Once the in-progress state requirements have been fully implemented, more than a third of U.S. high school students will have guaranteed access to a personal finance course. Momentum is expanding beyond guarantee states, too. There are 48 personal finance bills pending in 18 states according to NGPFโs financial education bill tracker.
Importantly, 88% of surveyed adults support personal finance education mandatesโand most wish they had also been required to take a personal finance course themselves.
When we ask the next generation of graduates if they understand how to build a budget, it’s more likely that they will confidently say โyesโ.
Personal Finance
Ranked: The Best and Worst Pension Plans, by Country
Which countries are best equipped to support their elderly citizens? This graphic compares pension plans around the world.

The Best and Worst Pension Plans Worldwide
Each year, millions of people around the world leave the workforce to retire.
But as the global population grows older, and the COVID-19 pandemic accelerates the already rising number of retirees, there is still a large degree of variance in the quality of public pension plans around the world.
Which countries have invested in robust public pension programs, and which lag behind?
This graphic, using 2021 data from Mercer CFA Institute Global Pension Index, compares retirement income systems worldwide.
How the Index Ranks Pension Plans
Because a countryโs pension system is unique to its particular economic and historical context, itโs difficult to draw direct comparisons. However, there are certain elements that pension experts see as universally positive, and that lead to better financial support for older citizens.
As with previous rankings, Mercer and the CFA Institute organized these universal elements into three sub-indexes:
- Adequacy: The base-level of income, as well as the design of a regionโs private pension system.
- Sustainability: The state pension age, the level of advanced funding from the government, and the level of government debt.
- Integrity: Regulations and governance put in place to protect plan members.
These three measures were used to rank the pension system of 43 different countries, representing more than 65% of the worldโs population. This yearโs iteration of the index notably includes four new countriesโIceland, Taiwan, UAE, and Uruguay.
The Full Ranking
When it comes to the best pension plans across the globe, Iceland, the Netherlands, and Denmark have the top three systems.
Country | Overall Value | Adequacy | Sustainability | Integrity |
---|---|---|---|---|
๐ฆ๐ท Argentina | 41.5 | 52.7 | 27.7 | 43.0 |
๐ฆ๐บ Australia | 75.0 | 67.4 | 75.7 | 86.3 |
๐ฆ๐น Austria | 53.0 | 65.3 | 23.5 | 74.5 |
๐ง๐ช Belgium | 64.5 | 74.9 | 36.3 | 87.4 |
๐ง๐ท Brazil | 54.7 | 71.2 | 24.1 | 71.2 |
๐จ๐ฆ Canada | 69.8 | 69.0 | 65.7 | 76.7 |
๐จ๐ฑ Chile | 67.0 | 57.6 | 68.8 | 79.3 |
๐จ๐ณ China | 55.1 | 62.6 | 43.5 | 59.4 |
๐จ๐ด Colombia | 58.4 | 62.0 | 46.2 | 69.8 |
๐ฉ๐ฐ Denmark | 82.0 | 81.1 | 83.5 | 81.4 |
๐ซ๐ฎ Finland | 73.3 | 71.4 | 61.5 | 93.1 |
๐ซ๐ท France | 60.5 | 79.1 | 41.8 | 56.8 |
๐ฉ๐ช Germany | 67.9 | 79.3 | 45.4 | 81.2 |
๐ญ๐ฐ Hong Kong | 61.8 | 55.1 | 51.1 | 87.7 |
๐ฎ๐ธ Iceland | 84.2 | 82.7 | 84.6 | 86.0 |
๐ฎ๐ณ India | 43.3 | 33.5 | 41.8 | 61.0 |
๐ฎ๐ฉ Indonesia | 50.4 | 44.7 | 43.6 | 69.2 |
๐ฎ๐ช Ireland | 68.3 | 78.0 | 47.4 | 82.1 |
๐ฎ๐ฑ Israel | 77.1 | 73.6 | 76.1 | 83.9 |
๐ฎ๐น Italy | 53.4 | 68.2 | 21.3 | 74.9 |
๐ฏ๐ต Japan | 49.8 | 52.9 | 37.5 | 61.9 |
๐ฐ๐ท Korea | 48.3 | 43.4 | 52.7 | 50.0 |
๐ฒ๐พ Malaysia | 59.6 | 50.6 | 57.5 | 76.8 |
๐ฒ๐ฝ Mexico | 49.0 | 47.3 | 54.7 | 43.8 |
๐ณ๐ฑ Netherlands | 83.5 | 82.3 | 81.6 | 87.9 |
๐ณ๐ฟ New Zealand | 67.4 | 61.8 | 62.5 | 83.2 |
๐ณ๐ด Norway | 75.2 | 81.2 | 57.4 | 90.2 |
๐ต๐ช Peru | 55.0 | 58.8 | 44.2 | 64.1 |
๐ต๐ญ Philippines | 42.7 | 38.9 | 52.5 | 35.0 |
๐ต๐ฑ Poland | 55.2 | 60.9 | 41.3 | 65.6 |
๐ธ๐ฆ Saudi Arabia | 58.1 | 61.7 | 50.9 | 62.5 |
๐ธ๐ฌ Singapore | 70.7 | 73.5 | 59.8 | 81.5 |
๐ฟ๐ฆ South Africa | 53.6 | 44.3 | 46.5 | 78.5 |
๐ช๐ธ Spain | 58.6 | 72.9 | 28.1 | 78.3 |
๐ธ๐ช Sweden | 72.9 | 67.8 | 73.7 | 80.0 |
๐จ๐ญ Switzerland | 70.0 | 65.4 | 67.2 | 81.3 |
๐น๐ผ Taiwan | 51.8 | 40.8 | 51.9 | 69.3 |
๐น๐ญ Thailand | 40.6 | 35.2 | 40.0 | 50.0 |
๐น๐ท Turkey | 45.8 | 47.7 | 28.6 | 66.7 |
๐ฆ๐ช UAE | 59.6 | 59.7 | 50.2 | 72.6 |
๐ฌ๐ง UK | 71.6 | 73.9 | 59.8 | 84.4 |
๐บ๐พ Uruguay | 60.7 | 62.1 | 49.2 | 74.4 |
๐บ๐ฒ U.S. | 61.4 | 60.9 | 63.6 | 59.2 |
Average | 61.0 | 62.2 | 51.7 | 72.1 |
Icelandโs system ranks high across all three sub-indexes. The country offers a state pension with two components: mandatory contributions from both employees and employers, and optional contributions to state-approved pension products.
Its system has a high contribution rate, which ultimately results in a generous state pension that retirees in Iceland can tap into. The country also has a relatively low gender pension gap, meaning the difference between the average female pension versus male pension is relatively smallโespecially compared to other OECD countries.
On the opposite end of the spectrum, the Philippines, Argentina, and Thailand scored the lowest on the ranking.
Thailand scores particularly low in the adequacy category, with a score of 35.2. To increase its score, Thailand could increase the minimum payments for its poorest demographic and include more employees in occupational pension schemes.
Recommendations for Better Pension Plans
According to the index, countries seem to be steadily improving their pension systems. From 2020 to 2021, the average score of the overall index increased by 1.0.
With an average of 60.7, the index shows that most countries’ systems have some good features, but they also have some significant shortcomings that could be addressed by the following recommendations:
- Boosting adequacy by increasing coverage, and including more employees in private pensions systems.
- Increasing sustainability by adjusting retirement pension age to reflect increasing life expectancy, and promoting higher workforce participation from older citizens.
- Raise integrity by introducing policies that reduce the gender pension gap and discrepancies amongst minorities.
Countries that implement even a few of these changes could make a huge difference for their next generation of retireesโand those that donโt could be in trouble in the near future.
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