The Extraordinary Rise in the Wealth of Older American Households

There has been a seismic shift in age-wealth profiles in the U.S. over years 1983 to 2022. The most notable is the sharp rise in the relative household wealth of age group 75 and over. Correspondingly, the relative wealth holdings of all other age groups dropped over these years. Using the Survey of Consumer Finances, the paper focuses on the youngest age group, 35 and under, and the oldest age group, 75 and over, and analyzes the factors behind these relative shifts in wealth. I find that the three principal factors are the homeownership rate, total stocks directly and indirectly owned, and home mortgage debt. The homeownership rate is the same in the two years for the youngest group but falls relative to the overall rate, whereas it shoots up for the oldest group both in actual level and relative to the overall average. The value of stock holdings rises for both age groups but vastly more for the oldest households compared to the youngest ones and accounts for a substantial portion of the elderly’s relative wealth gains. Mortgage debt rises in dollar terms for both groups but considerably more in relative terms for the youngest group.