A lot of people fared very poorly during the outbreak of covid-19: The pandemic has taken more than one million lives in the US, not to mention the countless others struggling with the aftereffects of their infections. But because of huge gains in the housing market and the stock market since the recession that came after a brief, intense pandemic recession, some American bank accounts are looking very healthy after the fact. One group that’s done especially well, according to a study highlighted by Bloomberg, is older Americans.
The Federal Reserve Bank of St. Louis, in a February report titled “U.S. Wealth Inequality: Gaps Remain Despite Widespread Wealth Gains,” notes that “wealth grew markedly for all groups,” rising 25% as a whole. But many of the disparities in how that wealth is distributed, whether along racial or other lines, persisted. One such gap, between households headed by 20- and 30-somethings and those in their 60s or older expanded: Their differences in median wealth grew to $347,000, up $93,000 from just three years earlier. The median older household is now worth more than $400,000.
This isn’t to say that older Americans are all doing well across the board. Many of them have had to go back to work when their retirement savings ran out faster than expected, thanks to higher costs of living or other factors. But those who were financially secure have become even moreso in the meantime.
“Wealth, like other financial outcomes, follows what is known as a ‘life cycle,’ the St. Louis Fed report reads, highlighting its age wealth gap. “In short, individuals have little wealth when they are young but typically accumulate some by their retirement. However, as the figure shows, that relationship has become starker over time.”