Why Baby Boomers Have More Money Than Everyone Else

It is the richest of times, all apologies to Dickens, and it is the most unequal of times.

- Allison Schrager

The difference in wealth and income between the top 1 percent and the rest of America tends to get more attention, but one of the more striking wealth gaps is generational: Older Americans are far richer than young Americans.

The good news is that most Americans of all ages have never had more wealth. But estimates in new research from economist Edward Wolff at New York University, who has long studied wealth in America, show a large and growing gap in net worth between Americans over age 75 and those under 35. No wonder everyone hates the boomers.

Several economic trends have contributed to this divergence. One is the increase in stock ownership: In 1989, only 32 percent of Americans (of all ages) owned stock; by 2022, 58 percent did. This is in large part because 401(k)-type plans became more common and, according to the paper, displaced more liquid and less remunerative forms of saving such as checking accounts.

Boomers were the first generation to be offered official retirement plans at work when they were young, and they have contributed to their wealth in retirement. Because such plans are cheaper for employers to offer than defined-benefit plans, more people have them, and more have retirement benefits, period.