Tag: Survey of Consumer Finances

Stark Inequality: Financial Asset Inequality Undermines Retirement Security

Mary Pat Campbell
Stark Inequality: Financial Asset Inequality Undermines Retirement Security

Link to full report: https://www.nirsonline.org/wp-content/uploads/2021/08/Stark-Inequality-F2.pdf

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Excerpt:

Inequality in the ownership of financial assets both persists and deepens over time. The top five percent of Baby Boomers by net worth owned a greater percentage of that generation’s financial assets in 2019 (58 percent) than in 2004 (52 percent).

Inequality in the ownership of financial assets is consistent across generations. In 2019, the top 25 percent by net worth of Millennials, Generation X, and Baby Boomers owned three-quarters or more of their generation’s financial assets.

Financial asset ownership is highly concentrated among white households. In 2019, white households in all three generations owned three-quarters or more of their generation’s financial assets. Ownership is especially concentrated among white households in the top 25 percent of net worth.

Both mean and median financial assets were significantly higher for white households in 2019 than Black or Hispanic households.

A range of potential solutions exists to address this stark inequality including strengthening and expanding Social Security, protecting pensions, increasing access to savings-based plans for low-income workers, and reforming retirement tax incentives.

Author(s): Tyler Bond

Publication Date: September 2021

Publication Site: National Institute on Retirement Security

Here’s the average net worth of Americans ages 65 to 74

Mary Pat Campbell

Link: https://www.cnbc.com/select/average-net-worth-of-americans-ages-65-to-74/

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Excerpt:

According to the Fed data, the median net worth for Americans in their late 60s and early 70s is $266,400. The average (or mean) net worth for this age bracket is $1,217,700, but since averages tend to skew higher due to high net worth households, the median is a much more representational amount.

While $266,400 may seem like a lot of money at first, people in their 60s usually start tapping into their net worth to cover living expenses in retirement. When planning for your non-working years, it’s important to understand how net worth works and how it relates to living on a fixed income.

Here’s a look at the average and median net worth by age in the U.S., according to the Fed. As you can see, net worth tends to peak for most American during the decade after age 65.

Author(s): Megan DeMatteo

Publication Date: 4 May 2021

Publication Site: CNBC