Record age wealth gap: 60+ = 170K median net worth, under 35 = 3.6K
Wealth gap between old and young at record high
The wealth gap between younger and older Americans has stretched to the widest on record, worsened by a prolonged economic downturn that has wiped out job opportunities for young adults and saddled them with housing and college debt.
The typical U.S. household headed by a person age 65 or older has a net worth 47 times greater than a household headed by someone under 35, according to an analysis of census data being released today.
While people typically accumulate assets as they age, the wealth gap is now more than double what it was in 2005 and nearly five times the 10-to-1 disparity a quarter-century ago, after adjusting for inflation.
The median net worth of households headed by someone 65 or older was $170,494. That is 42 percent more than in 1984, when the Census Bureau first began measuring wealth broken down by age. The median net worth for the younger-age households was $3,662, down by 68 percent from a quarter-century ago, according to the analysis by the Pew Research Center.
2. I would assume there's a sort of bell curve here
Edited on Mon Nov-07-11 01:09 PM by grasswire
As Americans came out of the Great Depression, the WW2 generation was able to own homes -- many on the G.I. bill -- homes that appreciated every year. Was it those post-war benefits that allowed this blip in wealth? Home loans and college educations for veterans?
People certainly didn't have that level of old-age comfort prior to the aging of the WW2 generation.
So there was a fifty year blip, from 1945-1995 or so, when adults could accumulate assets. The prosperity we saw in America was aberrant. Not sustainable.
What I'm saying is that younger people shouldn't assume that the current economy is something that has happened only to them. Their great grandparents and great great grandparents lived in very meager or modest times as did generations before them.
I'd like to see it on a graph for the last 200 years.
37. No, we know they had more, because the article tells us
While people typically accumulate assets as they age, the wealth gap is now more than double what it was in 2005 and nearly five times the 10-to-1 disparity a quarter-century ago, after adjusting for inflation. ... The median net worth of households headed by someone 65 or older was $170,494. That is 42 percent more than in 1984, when the Census Bureau first began measuring wealth broken down by age. The median net worth for the younger-age households was $3,662, down by 68 percent from a quarter-century ago, according to the analysis by the Pew Research Center.
40. That is because previous generations received monthly checks from
their union and employer pension funds. This generation, however, saved in 401(K)s. It is just a different way of counting the wealth of the seniors.
In fact, I believe that the inspector general released a report after the release of this rather silly report showing that seniors are worse off (as is everyone else) than they were years ago.
The stock market crash and the low interest rates have blown a hole in the 401(K)s of seniors. So the whole Nixon idea that you should save for yourself makes my generation look richer, but we really are far less secure and less well off than our parents were at our ages.
3. Partly due to social security and medicare which is not means tested.
Edited on Mon Nov-07-11 01:19 PM by dkf
This enables the elderly with assets to keep their assets intact and to grow their wealth. And as you get older, if your medical needs are taken care of and you paid for your house, everything else is gravy.
From the article:
The report, coming out before the Nov. 23 deadline for a special congressional committee to propose $1.2 trillion in budget cuts over 10 years, casts a spotlight on a government safety net that has buoyed older Americans on Social Security and Medicare amid wider cuts to education and other programs, including cash assistance for poor families.
"It makes us wonder whether the extraordinary amount of resources we spend on retirees and their health care should be at least partially reallocated to those who are hurting worse than them," said Harry Holzer, a labor economist and public policy professor at Georgetown University who called the magnitude of the wealth gap "striking."
19. That is such BS. How old are you DKF? Do you have any idea how much medical care
and prescriptions cost?
My inlaws have significant assets. They also have been retired and living off those assets 20+ years. It has been only the past few years that they've really been going through money and it's all medical - despite SS, Medicare, and long term care insurance there are all kinds of deductibles and #of days per incidents before benefits kick in etc... everything else is out of pocket. Even if you get $1000 per month in Social Security, that could be 3 prescriptions.
And you can bet Wall Street will try to skim as much as they can off those assets before they become inheritance (if there is inheritance by the time the insurance companies and hospitals are done with us ...)
This is why we need universal health care amongst other changes.
when this country still supported the idea of a affordable college education and protected the rights of workers to earn a decent wage at a decent job. Opportunities that are only available to a few younger citizens of this country at this time.
29. In the 1960s, conservatives like William F. Buckley propagandized the
American people. That stirred up suspicion and anger against people perceived as members of minorities and "liberals." The propaganda against "liberals" blasted common sense out the windows in the 1980s. Today's young people are paying for the mistakes made by Americans who succumbed to racist ideology and voted for Reagan in 1980.
That is why young people have such a raw deal. This is not inevitable.
We can change things if we return to a philosophy of sharing.
12. Actually, Social Security and Medicare are in a sense means tested
because you pay extra taxes if you have additional income that amounts to more than $80,000 or more than $40,000. I can't explain it, but I have a sister who paid into Social Security for years, but gets maybe $5000 per year because she has other income that is very high.
17. DKF, that seniors have savings is the result of capitalism.
As I recall it's the kind of thing you defend a lot here on DU.
Today's seniors paid for their parents. Now it is the turn of our children to pay our monthly Social Security. That is the way we do it in America. Social Security is simply the urbanization of an age-old tradition which is state in the Ten Commandments as "Honor your father and your mother, that your days may be prolonged in the land which the LORD your God gives you." The meaning of that Commandment is that taking care of your parents is essential if you are to have a healthy, secure society.
And let me tell you, as one who is now 68, we went through this same unemployment before.
When my husband and I were 35, we had no savings and were starting our family. Only after our children were grown, were we able to save any significant amount.
This right-wing propaganda straight out of Pete Peterson's lie fabrication plant.
Very, very few of my friends who are seniors have anything near $170,000 in assets.
Warren Buffet, I'm sure, has far more. That's how they get this number.
I studied this in the 1990s. At that time, the average retiree had less than $10,000 in savings. This figure is misleading.
Interesting how they compare the alleged savings of today's seniors with those of seniors in, I think, 1984. In 1984, seniors were very likely to have work-related or union-related pensions. During the 1970s, the ERISA Act was enacted and people began to have 401(K)s.
You cannot compare a system in which individuals save for retirement with a system in which workers put money into a common fund and receive a pension from that fund with today's method of saving. Comparing 1984's seniors' savings to those of today's seniors is misleading.
Let's say you receive the average Social Security benefit which is less than $1200 per month. Let's say you also have $170,000. Right now, you receive at most maybe 1.4% interest on your savings. Most likely some of that $170,000 is actually the market value of your house or the equity you have in a house. If that is so, you probably pay $3,000 or so per year in property taxes. You also pay a minimum of $100 per month and probably much more for your Medicare supplemental insurance and co-pays. Medicare is not free for most seniors. Then you have upkeep on your house and insurance for your house and car or renter's insurance just like everyone else.
If you are 65 and live and additional 20 years, you actually have your Social Security of $14,500 per year plus maybe 1.4% of the $170,000 and that $170,000 divided by 20 years gives you an additional $8,500 per year or a total income of just over $22,000.
That is probably considerably less than the income of the average 35-year-old.
Of course people who earned very little during their working lives will have far less when they retire.
But think of it. $22,000 is between $8 and $9 per hour. That is just about minimum wage for a full-time employee in California.
The reality is, of course, that most seniors want to leave money to their children, so they won't spend the $170,000 except in emergencies.
And the reality also is, that most young families would prefer to pay into Social Security considering that the alternative is having your parents move in with you and your chldren.
Being able to enjoy retirement is part of the definition of being middle class in America.
Prior to Social Security, the majority of Americans lived on and farmed their own land. If they worked hard during their youth, they could sell their land or receive a share of the profits from the farming on the land of their children.
During the 1930s, farms were foreclosed in huge numbers, and many, many Americans were forced out of their properties, out of the properties that would have been their source of income once they could no longer work. The numbers of very poor elderly people was overwhelming and disturbing to everyone. That is why Social Security was instituted. As people moved into urban living, they did not have the ability to invest in property and save for their senior years in that way.
This anti-Social Security propaganda just makes me sick.
When we were young, we went through very difficult times. That is a normal part of being young. My husband had a PhD. Nixon cut funding for universities and my husband had no job.
Young people today are having a hard time, just as we did then. That is what Occupy Wall Street is about.
I note that young people have enormous economic power but do not use it. If they stopped buying I-Phones and similar electronic equipment unless made in the USA, they could change our entire economy. Once they recognize what power they have, they will do just fine.
Every time a young person buys some electronic equipment made overseas, he contributes to the high unemployment in the US. Older people are not buying that stuff much.
30. We use the iPhones to livestream the revolution
I'm all up for not buying corporate shit in general, but cell phones with the capability to document and show what's really going on, including things like police abuse, to the whole world is not a product I'm going to advocate that people stop buying.
I am definitely down with buying cell phones made in the US and pressuring companies to make their stuff in the US. But I think that's a compromise we're going to have to make for now, because cell phones are extremely important.
Also - I'm 30, and I kind of think our hard time is different. You guys could go to school, and come out without a ton of debt. You guys still had a somewhat working government. You weren't up against outright global fascism.
We prepaid our own retirement plus paying for our parents with higher FICA taxes starting in the 80s. That's why the trust fund has a surplus, and why more is now being paid out instead of paid in--THAT IS SUPPOSED TO HAPPEN!! When the trust fund is empty (and the baby boom pig gets through the python), the system will go back to pay as you go.
8. This is the type of article that is meant to be divisive.
It is designed to create tension and resentment between generations. This problem is with the 1% not with the older people in this country. They did not do anything wrong in accumulation a small amount of wealth for their old age. That is what they were told to do. And remember a net worth of $170,000 can easily be wiped out with one extended nursing howe stay.
Those at the top want to keep dividing us by color, by ethnicity, by sexual preference, by sex, and by generation. Anything they can do to keep us from focusing on the vacuum system that is sucking this country into poverty.
I lived paycheck to paycheck for my entire life, sometimes floating checks with friends (back when you could do that before instant banking) or writing a check for "cash over" at the grocery store when I knew I had no balance in my checking account but I was going to get paid the next day. I had ZERO savings. I drove old beater cars that kept breaking down when I could least afford it. When my mother passed away in 1999, she left each of us kids with a small inheritance that I invested like you're supposed to do and then watched dwindle away with the crash.
I've had something of a reversal of fortune within the past 10 years, reconnecting with my high school sweetheart (from 1963), who had the good sense (or luck) to go to sea for 25 years and earn a MEBA defined pension, something that has gone the way of cheap college and so many other advantages that people in our generation had that kids today don't. When I go down to the Occupy Anchorage encampment, I'm doing it for my daughters and grandkids.
15. Be careful not to confuse average and median numbers .......
..... as they can be very different. The OP speaks of median net worth. You were quoting average (mean) net worth. As was pointed out on another thread this morning, the 1% skews the averages much more than the median figures.
And you've actually figured out yourself why your 1990s book is no good for getting the figures from (apart from being perhaps 15 years out of date): this is not '$170,000 in savings' ('savings' aren't mentioned once in the article), it is net worth, which includes the values of houses. If it's not clear:
Household wealth is the sum of all assets (house, car, savings account, 401(k) account, etc.) minus the sum of all debts (home mortgages, car loan, student loan, credit card debt, etc.) of everyone living in the household.
21. But, the elderly are spending more of their money on medical costs.
On Monday, the Census Bureau planned to release new 2010 figures that will show a big increase in poverty for Americans 65 or older due to rising out-of-pocket medical expenses. Currently, about 9 percent of older Americans fall below the poverty line, based on the official definition put out in September, but that number did not factor in everyday costs such as health care and commuting.
The new supplemental figures will show poverty to be higher than previously known for several groups, although they may not fully reflect longer-term changes. For instance, a recent working paper by the National Bureau of Economic Research found that U.S. spending on the safety net from 1984 to 2004 shifted notably toward programs benefiting the near-poor rather than the extreme poor and to the elderly rather than younger adults. That trend, which has continued since 2004, has led to faster increases in poverty over time for some of the underserved groups.
Robert Moffitt, a professor of economics at Johns Hopkins University and co-author the paper, cited a series of cuts in government programs since 1984 for the neediest, including welfare payments to single parents and the unemployed under the Temporary Assistance for Needy Families program, while Social Security and Medicare have either been expanded or remained constant.
The 1% and Reaganomics finished off the poor who are young by destroying welfare (thank you, Bill Clinton) and funding for education.
Now the same people who caused the suffering of today's young people want to do the same to seniors. Instead of picking on seniors, young people need to demand the replacement of oppressive student loans with work/study programs and welfare jobs for the very poor.
my net worth would probably be a lot closer to the under 35 category. My house is paid for-the tax assessor says it's worth $130K but in the real world I might get $90K for it. Outside of that, all my other assets might be worth $20k on a good day.
Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators
Important Notices: By participating on this discussion
board, visitors agree to abide by the rules outlined on our Rules
page. Messages posted on the Democratic Underground Discussion Forums are the
opinions of the individuals who post them, and do not necessarily represent
the opinions of Democratic Underground, LLC.