Outline:
If you believed the baby boomer generation was particularly fortunate, the Federal Reserve has information that supports this idea.
By mid-2025, the American baby boomer generation, which includes individuals born from 1946 to 1964, held a collective wealth of $85.4 trillion (1). This amount is almost three times the size of the U.S. economy (2).
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The total wealth of this group surpasses that of any other generation. Baby boomers own 51.1% of the country’s wealth, while millennials hold only 10.7% (1).
That disparity, according to experts, not only provides older Americans with a significantly more comfortable way of living but also hinders younger employees from accumulating their own resources. The outcome is a generation approaching middle age with considerably reduced financial stability.
Here’s what specialists claim about this intergenerational wealth gap and how it is impacting younger Americans negatively.
Pulling up the ladder
Experts recommend that a significant portion of the baby boomer wealth, mainly found in real estate and stock markets, was built during considerably different economic conditions.
In 1980, during the time when this generation was beginning their careers or had young families, housing costs were significantly more manageable. The average home price was approximately $65,000 (3).
This not only made home ownership more accessible for baby boomers, but also enabled them to set aside funds to invest in the stock market, which was also more affordable during that period. In 1980, the S&P 500 had a price-to-earnings (P/E) ratio of around 7.4, indicating that investors were paying $7.40 for every $1 in earnings (4).
Currently, the average home price is $410,800 (5), while the S&P 500 has a P/E ratio of approximately 31 (4). Put simply, millennials and Generation Z encounter greater challenges in entering the market, while also coping with increased living expenses that limit their capacity to save.
The circumstances are expected to remain unchanged for the foreseeable future.
“One important action that baby boomers and older generations have taken is lifting the housing ladder behind them by embracing NIMBY [not in my backyard] attitudes over the past few decades,” said Jake Krimmel, a senior economist at Realtor.com, recently (6).
As per Krimmel’s study, baby boomers owned 30% of the country’s overall wealth and 40% of its real estate holdings in 1995. “It’s true that boomers have remained at the top throughout their adult years, causing other generations to fall behind and face greater challenges,” he mentioned.
If you’re young, the chances may be against you. However, that doesn’t imply you can’t attempt to shift them in your direction.
Continue Reading: The typical net worth of Americans stands at an unexpected $620,654. However, it holds very little significance.Here’s the key figure (and how to make it explode)
How to increase your chances
Even with the challenges in the structure, there are still opportunities for young Americans to succeed.
One of the most impactful actions is to develop advanced skills that open doors to high-income job opportunities.
As per the Bureau of Labor Statistics, the top six-figure jobs expected to grow the most by 2034 are nurse practitioners, data scientists, information security analysts, medical and health services managers, actuaries, physician assistants, computer and information research scientists, and postsecondary health specialties teachers (7).
Young Americans may also avoid thestudent debt crisisby pursuing well-paying careers in skilled trades. Vocational institutions and brief apprenticeship programs can offer the necessary training for high-income positions like power plant operator, elevator mechanic, and construction inspector, as reported by Indeed (8).
By steering clear of debt and increasing your earnings, you can gain some flexibility in your monthly expenses to begin saving and investing. Although stocks and real estate might be pricier now than they were in the 1980s or 1990s, this doesn’t indicate they won’t keep increasing in value over time.
Choosing a partner and postponing having children can also enhance your likelihood of achieving financial success. The so-called DINK, or dual income, no kids way of life allows for additional disposable income that can be used to pay off debt more quickly or invest with greater intensity. Sharing significant expenses, like rent or a mortgage, is another financial benefit of this lifestyle choice.
A mix of these approaches could help you outperform your colleagues and potentially reach the level of the typical baby boomer.
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Article sources
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Board of Governors of the Federal Reserve System1); Federal Reserve Bank of St. Louis (2), (5); United States Census Bureau (3); Mltpl.com (4); Realtor.com (6); U.S. Department of Labor Bureau of Labor Statistics7); Indeed (8)
This piece offers information solely and should not be interpreted as guidance. It is offered without any form of assurance.