Study shows increasing disparity in wealth between young and old
Whether you are a young adult trying to pay off student loans or buy your first home or an older person wondering how you are going to afford retirement, you have likely been affected in some way by the stagnant economy. However, a new study from the Pew Research Center indicates that the current disparity in wealth between young and older people is much larger than in previous decades, leaving young people at greater risk for bankruptcy, foreclosure, or other difficult consequences.
According to the study, the age-based wealth gap jumped to 47:1 in 2009 from 10:1 in 1984. Specifically, the median net worth of households headed by people over the age of 65 was approximately $170,500 in 1984. This marked a 42 percent increase from the median net worth of that age group in 1984, which was just under $120,500. In comparison, the net worth of households headed by adults under the age of 35 actually decreased by almost 70 percent during that same period, going from $11,500 in 1984 to $3,660 in 2009.
Certainly, the economy had something to do with this startling disparity. But researchers believe that there are other factors at play, such as shifts in the housing market and workforce and delays in marriage and retirement. “These age-based gaps widened significantly during the sour economy of recent years, but all key trends are several decades old,” researchers stated, “indicating that they are also linked to long-term demographic, social and economic changes that have affected different age groups in different ways.”
What do you think? Has the age-based wealth gap affected you or anyone you know?
Source: ABC News, “Age Gap Rises in Economic Well-Being,” Susanna Kim, Nov. 7, 2011