What Generation Has the Most Money and Why?
Explore which generation holds the most wealth and the economic factors driving its accumulation and transfer.
Understanding wealth distribution across generations offers insight into economic landscapes. Wealth is rarely distributed evenly, with various factors shaping the financial standing of generational groups over time.
Defining Generations and Wealth
Common generational categories include:
Silent Generation (born before 1946)
Baby Boomers (1946-1964)
Generation X (1965-1980)
Millennials (1981-1996)
Generation Z (1997 or later)
In financial contexts, “wealth” refers to net worth, calculated as total assets minus total liabilities. Assets include real estate, investment portfolios, retirement accounts, and savings; liabilities include mortgages, student loans, and credit card balances.
Current Generational Wealth Distribution
The Baby Boomer generation currently holds the most substantial share of wealth in the United States. As of July 2024, Baby Boomers collectively possess 51.8% of total U.S. wealth, approximately $78.55 trillion. Their average household net worth stands at around $1.6 million.
Older generations (over 55) collectively own about 73% of all U.S. wealth, with Baby Boomers holding the largest concentration. Generation X holds 25.8% of total wealth, about $39.09 trillion, with an average household net worth of approximately $1.11 million.
Millennials and Generation Z hold a combined 9.4% of total wealth, roughly $14.21 trillion. The Silent Generation retains 13.1% of total wealth, or $19.84 trillion, with an average household net worth of about $1.29 million.
Key Drivers of Generational Wealth
Wealth accumulated by Baby Boomers stems from economic conditions during their prime earning and asset accumulation years. Many entered the workforce during sustained economic growth and post-World War II prosperity, providing a stable foundation for financial advancement.
The accessible housing market was a key driver. Baby Boomers purchased homes when prices were relatively low, often around twice the median annual salary. Since 1983, property values surged by approximately 500%, allowing early homeowners to amass substantial equity through appreciation. This formed a significant component of their wealth.
Baby Boomers benefited from a prolonged bull market in stocks. They experienced decades of rising asset prices and were among the first to be widely offered 401(k) retirement plans with employer matching contributions. This provided a mechanism for wealth growth through equity investments, which saw substantial returns. The S&P 500 has risen nearly 20-fold since 1989, contributing to their portfolios.
Favorable interest rates also played a role. While high in the early 1980s, rates trended downward, making mortgages more affordable. Lower education costs meant less student loan debt, freeing income for savings and investments. Many Baby Boomers retired before major financial crises like the 2008 recession and the COVID-19 pandemic, preserving their wealth.
Understanding Generational Wealth Transfer
Generational wealth transfer involves moving accumulated financial resources from one generation to the next. Mechanisms include inheritances and inter-vivos gifts, made during the giver’s lifetime. This signifies a flow of existing wealth, not new asset creation.
The Baby Boomer and Silent Generations are projected to transfer $84.4 trillion in assets through 2045. An estimated $72.6 trillion is expected to go directly to heirs. Baby Boomers alone are anticipated to account for $53 trillion, or 63%, of these transfers.
The size of the Baby Boomer population makes this impending wealth transfer significant. The U.S. tax code influences the scale of these transfers, allowing transmission of substantial sums without federal estate tax for most estates. This mechanism is distinct from wealth accumulation, focusing on redistribution of existing assets.