Americans over the age of 70 control more than 30% of the country’s wealth (Bloomberg) — Most no longer work, but Americans aged 70 and up saw their share of collective wealth increase during the pandemic.
According to Federal Reserve data, these older baby boomers have accumulated more than $14 trillion in additional net worth since the end of 2019. Their share of the country’s wealth reached a record 30% last quarter, even though they account for 11% of the population.
Some of the gains can be attributed to the aging population: There are approximately 2.3 million more people over the age of 70 in the country than in 2019. However, one major driver was the rise in home values and stock prices during the pandemic, which benefited older generations who were more likely to own a home — or two — and invest in stocks or mutual funds.
Although most people over the age of 70 are retired, a growing proportion of that age group is still working. According to Bureau of Labor Statistics data, the share of adults 65 and older in the labor force reached a historic low of 10% in the mid-1980s but has since nearly doubled, even after many retired early due to the Covid-19 health crisis.
The Fed data also show that Americans between the ages of 40 and 70, when people typically reach their peak earnings, own a smaller share of household wealth than in 2019.
When measured over a longer period of time, the sharp increase in wealth for older people is even more pronounced. In the last 25 years, the aggregate wealth of Americans aged 70 and up has increased sixfold to $43.3 billion. Over the same time period, the wealth of those under the age of 55 increased roughly 2.5 times.
Stock market timing benefits older Americans
Older Americans have also benefited from good timing in the stock market, despite recessions along the way. Since 2019, those aged 70 and up have amassed approximately $5 trillion in equity gains. Approximately 38% of the nation’s corporate equities and mutual funds were held by individuals in that age group in the third quarter, the highest share on record in data going back to 1989.
The gains for equity investors continued this quarter, as stocks rose on expectations that the US Federal Reserve will begin cutting interest rates in 2024.
According to separate Fed data, the country’s ultrarich has helped boost the average equity holdings of people over 65 to around $1.8 million in 2022.
The data obscures inequalities, and the Covid-19 era has widened the gap between those who owned assets such as a house and stocks prior to the pandemic and those who did not. Millions of older Americans are struggling, with more than one in ten Americans over the age of 65 living in poverty.
