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Published: Feb 09, 2024 4 min read
Photo-illustration of a figurine walking up a dollar bill folded into stairs.
Money; Getty Images

At the onset of the pandemic, millennials and adult Gen Zers held onto just under 5% of total U.S. wealth. By contrast, boomers and their parents dominated nearly three quarters of it.

But now, young adults are starting to quickly close the gap. A new wealth inequality study from the New York Federal Reserve found that adults under the age of 40 have grown their wealth a whopping 80% since 2019, far outpacing the financial growth of their elders.

“Real wealth has increased for all three age groups since 2019,” the NY Fed researchers wrote, "but the change has been most dramatic for younger adults.”

Americans 55 and older — roughly the age of baby boomers — have seen a 30% increase in wealth over that same time period. The wealth of those aged 40 to 54, aka Gen Xers, saw their wealth grow the least: 10%.

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What generation increased their wealth the most?

While the recent financial gains of younger folks are no doubt good news, a few key caveats to the NY Fed’s findings may sour the mood for Gen Zers and millennials eager for a rare financial win.

First, younger folks — by virtue of not having as much time as their elders to establish their careers, invest and grow their wealth — have lower net worths from the get-go. When viewed as a percentage, smaller numbers are, of course, more susceptible to larger percentage-point swings.

In terms of real dollars, young adults increased their collective wealth by about $3.8 trillion since the onset of the pandemic, while Americans 55 and older expanded their fortunes by $22 trillion, according to Money’s analysis of NY Fed data.

Wealth gains by age
Young adults have made strong progress but still lag behind
Wealth in 2019 % of U.S. wealth in 2019 Current wealth % of current U.S. wealth
Age 18-39 $5 trillion 4.9% $8.9 trillion 6.6%
Age 40-54 $25.5 trillion 23.5% $27.3 trillion 20.5%
Age 55+ $74.5 trillion 75.4% $97.3 trillion 72.9%
Source: Money, NY Federal Reserve. Current wealth based on July 2023 data. Amounts are adjusted for inflation.

Another key point to consider is how that money was made.

For folks under 40, the growth in their net worth was largely driven by surging post-pandemic stock markets. The researchers noted that people in this age group tend to have a larger exposure to stocks (and thus a riskier portfolio), which is why their net worths have disproportionately benefited.

On the other hand, surging markets indeed helped older Americans, but not to the same extent. What really drove wealth gains for them was considerable growth in real estate assets. According to the U.S. Census Bureau, more than 3 out of every 4 Americans aged 55 and older own a home, and since home values have soared in recent years, this has given older Americans a major boost to their net worth.

That said, the recent financial gains made by young adults have nonetheless resulted in a bigger piece of the U.S. wealth pie, and that's good news for them no matter how you cut it.

“Faster wealth growth among younger adults,” the researcher wrote, “has led to a limited narrowing of age-based wealth disparities over the past four years.”

Now, Money's analysis shows, they own about 7% of the nation’s wealth.

More from Money:

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