Generational Wealth Gap Is Greater Than 20 Years Ago

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The golden years have never glittered so bright, according to a recent MagnifyMoney analysis of Federal Reserve data that revealed baby boomers possess a much higher net worth than Americans in their age group 20 years ago.

Meanwhile, today’s millennials lag a little compared with their counterparts in 1998. In short, today’s baby boomers (ages 52 to 70 in 2016) are rolling in wealth while young adults struggle to stay above debt.

Key takeaways

  • The average millennial (ages 20 to 35 in 2016) has a net worth of $100,800 in 2019. By comparison, the average Generation Xer (ages 36 to 51) has a net worth of $509,100 and the average baby boomer has an average net worth of $1,210,100. The median net worth for millennials is $13,600, compared with $94,500 for Gen X and $206,700 for baby boomers.

  • The net worth gap between older and younger Americans has widened into a chasm during the last 20 years. In 1998, the average older household amassed roughly seven times the net worth of younger households ($747,600 versus $103,400). In 2019, the average boomer household has 12 times the net worth of a millennial household ($1,210,100 vs. $100,800).

  • Similarly, the median net worth of both millennials and Gen Xers is less than their age cohorts in 1998, while today’s baby boomers are slightly wealthier than their counterparts 20 years ago.

  • Millennial households have $2,600 less in net worth than those their age in 1998, when they had an average net worth of $103,400 in inflation-adjusted dollars. Meanwhile, the average baby boomer net worth has nearly doubled from households their age in 1998, from $747,600 in 1998 to $1,210,100 in 2019.
  • Despite being the youngest, millennials have liabilities (such as debt) in far greater proportions than the other age groups studied — roughly 44% the size of their assets. The 20-to-35 age group in 1998 only had liabilities 36% the size of their assets.

What is net worth and why is it important?

A person’s net worth is all their assets minus any liabilities. Net worth paints one of the most accurate portraits of someone’s financial health since it takes into account looming obligations like student or credit card debt, as well as assets such as home equity, investments and savings.

Examples of AssetsExamples of Liabilities
Home equityMortgage
Investments in stocks and bondsCredit card debt
Car (owned, not leased)Student loan debt
Cash value of whole life insuranceMedical expenses

You’ll notice that although assets help boost your net worth, not every asset is easy to convert into cash.

For example, if you own a car (or a plane or a yacht), it counts as an asset because, in theory, you can turn it into money should the need arise by selling it. But as anyone who has ever tried to sell a used car or even a house can attest, what the market will give you for the asset may not be what you expected. Not to mention an asset such as your vehicle or house fulfills a vital need (like getting you to work or providing you shelter) that you’ll have to satisfy one way or the other. Nonetheless, experts classify the value of these not-too-liquid sources of wealth as assets.

While one’s net worth can fluctuate dramatically depending on life events (think of all the debt assumed by taking out a mortgage on your first home or from student loans), the overall trend serves as a good measure of how well someone is meeting their financial obligations. Here’s the current breakdown of assets and liabilities for each of the age groups examined:

For today’s millennials, liabilities such as debt are about 44% of their assets. While Gen Xers have a greater amount of liabilities, they also have more assets, so liabilities are only roughly 24% of their assets. Boomers have the most advantageous ratio of liabilities to assets, with liabilities at only about 8% of their assets.

To find out your net worth, you can use Charles Schwab’s worksheet or calculators from Kiplinger or CNN Money, among many other options.


MagnifyMoney examined the most recent Federal Reserve data on household assets and liabilities and estimated the average increase in household asset and liability data based on economic data from the Federal Reserve and the Federal Deposit Insurance Corp., as of March 2019. Values for all dates are in inflation-adjusted dollars.