December 2, 2017

Net Worth by Age Over Time 1989 - 2016


The Survey Of Consumer Finances has net worth broken down by age groups.   They have data going back to 1989 and the report is every three years.    Taking that data and then adjusting for inflation to 2016 I get the following charts showing how net worth has changed for different age groups over the time period :








I also figured the % change from 1989 to 2016 for each age group :

Mean Median
Less than 35 83% 72%
35–44 100% 54%
45–54 134% 64%
55–64 194% 98%
65–74 194% 149%
75 or more 225% 187%


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2 comments:

  1. It's interesting to see the strong rise in the net worth of those 75+. Do you think that has to do with them not touching their money as much or just that they are the ones with the most invested in this recent bull market?

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  2. The median value of stock held went from about $6.5k in 1989 to ~$49k in 2016. That accounts for about 1/4 of the increase in median net worth among the people 75+. I'd assume that a lot of the rest of the increase is due to increased home equity.
    Homeownership increased and average equity increased about $170k. Thats the average increase but I assume it would drive up the median a lot.

    I think the dynamics for the median and mean values differ. Median is more typical households but the mean reflects things like business and real estate assets held by the more affluent.

    For the average net worths, I can find values for specific asset groups. The increases are spread across various assets.
    20% of the increase is from primary home equity, 12% is from other real estate and 18% is from business ownership. But only 8.5% of people had business equity and only 10-16% had other real estate.

    One thing to consider when looking at the increase in net worth in this timeframe is that more people hold retirement assets now than did 30-40 years ago but fewer have pensions. In 1989 only ~6% of people 75% had retirement accounts but by 2016 that had gone up to 40%. In that same period about the % of people who had traditional pensions dropped from ~30% to about 10%.
    The net worth figures don't account for the drop in pension value and thats an asset in retirement. So while retirement savings is going up, that is offset by a loss in pension income. More people are saving in retirement accounts because they have to and they may not be doing as well as far as income compared to previous decades when more people had pensions. e.g. would you rather have $200k more in the bank or a $40k/year pension?


    Jim

    ReplyDelete

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