As seen in The Fiscal Times today:
“A Census report released on Monday found that people between 35 and 44 saw a 59 percent decline in median household net worth between 2005 to 2010, the largest drop of all age groups. Those 55 to 64, only saw a 25 percent drop, though they had a larger decline in actual dollar amount.”
For all households, median household net worth decreased by 35 percent from 2005 to 2010. For Gen X, the cohort born between 1968 and 1979 and numbering between 46 and 55 million, lost 59% of net worth.
In other words, Gen Xers have felt the brunt of the recession, much of it due to unfortunate timing. When the real estate market turned, they had more recently entered the homebuying stage. Younger people haven’t had as many years as Baby Boomers or seniors to build up savings and diversify. And they were more likely than older adults to have young children still at home.
Who fared best? Seniors over 65. Here’s a chart from the Fiscal Times showing the decrease in median net worth by age groups, from 2005 to 2010, by percentage:
As the Census report notes,
“For householders 65 and older, median net worth was equal to $195,890 in 2005 and $170,128 in 2010; for householders under 35, median net worth was equal to $8,528 in 2005 and $5,402 in 2010 … [E]ven though the 65 and over population lost more net worth in absolute terms, the younger age groups were disproportionately affected in terms of the share of net worth lost.”
Related Post: Marketers Should Be Aware of a New Generation Gap – Debt
Yet as the report notes, while “those 55 to 64, only saw a 25 percent drop, they had a larger decline in actual dollar amount” meaning the impact of their income loss on the overall economy was greater. I blogged on a related issue in November of last year – “why the wealth gap matters to marketing researchers” http://newfoundinsights.com/category/blog/
Econ is always a complicated topic, with many moving parts (didn’t most of us struggle with it as undergraduates?), yet I think we all need to remember that the oldest generations (baby boomers and beyond) have accumulated the most household wealth, therefore they are still likely to have the greatest impact on the overall economic picture.