"The growing divide between the rich and poor in America is more generation gap than class conflict, according to a USA TODAY analysis of federal government data. The rich are getting richer, but what's received little attention is who these rich people are. Overwhelmingly, they're older folks.
Nearly all additional wealth created in the USA since 1989 has gone to people 55 and older, according to Federal Reserve data. Wealth has doubled since 1989 in households headed by older Americans.
Not so for younger Americans. Households headed by people in their 20s, 30s and 40s have barely kept up with inflation or have fallen behind since 1989. People 35 to 50 actually have lost wealth since 1989 after adjusting for inflation, Fed data show...
Social Security and Medicare increasingly are functioning as a transfer of money from less affluent young people to much wealthier older people.
Because the older generation hasn't set aside enough money to cover promised government benefits, young people will have to make up the difference or older people will face benefit cuts. The financial shortfalls of Social Security and Medicare over the next 75 years are so large — $340,000 per household — that they dwarf the wealth of every age group. This hidden debt will make it a challenge for young people to accumulate as much wealth late in life as their parents have."
The difference in average net worth is not small.
"•Ages 55-59: Median net worth — the middle point for all households — rose 97% [IT NEARLY DOUBLED] over 15 years to $249,700 in 2004, the most recent year for which data is available. Median income rose 52%.
•Ages 35-39: Median household net worth fell 28% to $48,940. Median income fell 10%."
This is some dramatic Generation Debt evidence right here. For more, read The Coming Generational Storm , by Scott Burns and Lawrence Kotlikoff, too.
1 comment:
Let's also remember who the beneficiaries of the housing boom are: Geezers. The Geezers are getting to charge prices for their homes that are much higher than historical rates, locking our generation into exorbitantly expensive mortgages. This is another example of wealth being transferred from the younger generation to the Geezer Generation.
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