Older Americans are 47 times richer than young

http://money.cnn.com/2011/11/07/news/economy/wealth_gap_age/

by orky56 • 15 years ago

8 17 15 years ago

money.cnn.com

_delirium2• 15 years ago

There might be something to do with pension plans as well; the current cohort of retirees got quite generous (by both historical and current standards) defined-benefit pensions.

antidaily• 15 years ago

Luckily corporations have shifted those funds to fat bonuses and golden parachutes.

brianweiner• 15 years ago

Remember this when they elderly fight tooth & nail against any cuts to their precious welfare programs...

The average medicare recipient has only paid ~$75K in taxes but will extract >$500K in services.

The 'Greatest Generation' is bankrupting this country.

protomyth• 15 years ago

technically, it is the generation after the "Greatest Generation" that is the problem.

timmaah• 15 years ago

The 'Greatest Generation' is just about gone. It is their kids doing the bankrupting.

Shivetya• 15 years ago

I get a different read from the story. The Greatest Generation has not spent themselves into debt with hundred dollar a month smart phone bills, five hundred a month auto leases, another fifty for high speed internet, a thousand dollars to coffee shop across a year, and so on and so on.

My parents are from this generation, they saved. I am trying to be the same way but it is very difficult. There are so many many temptations out there and we are heavily marketed too on every front.

Look, we have people lining up at night to buy iPhones, the latest video game, or to see a movie. That generation remembered people lining up for food, the draft, and other such true necessities of life then.

The "ME" generation is bankrupting America by wanting the rewards of a successful life without actually having to work for it. Instant gratification doesn't work, but it sure doesn't stop people running for office who promise it.

potatolicious3• 15 years ago

I think there's a bit of rose-tinted glasses going on here, and you're really painting a straw man.

Not all of us buy expensive smartphones, have $500 car loans, thousand-dollar coffee shop bills, etc etc.

Similarly, not all of your beloved, vaunted Boomers were penny-pinching misers who saved all they got and avoided the drive-in, movies, and bars.

My impression (never having lived it 60s and 70s, of course) is that people then we just as excessive as we are now, or at least the marginal difference can't explain away the giant gap in wealth.

_delirium2• 15 years ago

This is a sort of strange view, which isn't much in keeping with what I've read about the 1960s/70s. If anything they were something of a historical peak of decadence/entertainment, with people lining up for rock-show tickets and festivals (Woodstock being only the biggest of many), a huge explosion in car ownership (including a big increase in "muscle car" sales), big increases in sales for both the film and music industries as record numbers of people lined up to see the latest movie or buy the latest record, the growth of suburbia as suddenly everyone needed their own yard and 3-bedroom home, a big wave of people replacing their B&W televisions with fancy new color models, etc., etc.

However, it turned out well for them in net-worth terms because splurging on that suburban home in 1975 turned out to be a good real-estate investment, whether they bought it for that reason or not.

3pt14159• 15 years ago

Do you have a source for the 75k to 500k figure? I have problems with the Baby Boomers, but I never came across that stat before.

Also, is it adjusted for inflation? You could buy a car for $1k back in the day.

potatolicious3• 15 years ago

You can't help but be bitter about this.

We (the young) didn't do anything, or ask for anything. But thanks to the speculative greed of previous generations, we're saddled with (even post-crash) unaffordable housing prices that favor the already-wealthy. Buying a home on a middle class working income is nigh impossible, unlike in their generation. So far from joining the speculators, we can't even buy a roof over our own heads in most places, especially places with jobs.

Our governmental services are collapsing in a large part due to the money we're pouring into pensions - pensions that previous generations voted to give themselves. Ones far more generous than anything history has ever seen. Everything can go, including our education system, but the pension is sacrosanct. Touch it and a legion of Baby Boomers will have you for lunch.

We're the generation of suckers. We (and probably our children, too) are the ones who will be paying for the ludicrous excesses of the Boomers, while getting nothing ourselves. Defined benefit pensions? Hah! Traditionally people pay into their future. We are stuck paying our past.

Bitter? Me? How could you tell?

tptacek2• 15 years ago

They were also conscripted into wars with dizzying American casualties, had parents and siblings who died of polio, lived under continuous threat of nuclear annihilation, and had to call someone up on the phone to place a stock market order. Oh, and that whole internet thing.

Suggest looking forward, not back. What do we do next?

potatolicious3• 15 years ago

This is about looking forward. We're in dire economic straits, our funding for something as basic and fundamental s our children's educations are being threatened. Public libraries are closing across the country. Research funding is reaching dreadfully low levels - especially in comparison to countries that we now find ourselves competing with.

And on top of that, people are getting poorer. Even folks "protected" by traditionally pro-labour unions are being thrown under the bus to protect the pensions of its older members. The treatment of young union members by the organization that supposedly protects their rights is laughable if it weren't so damned unjust.

So yes, let's look forward. We face a desperate economic situation, in which we must all make deep cuts and great sacrifices if this country is to have a competitive future. Our education system has certainly paid the price. Our arts and culture, too. Taxes are rising, but yet the greatest liability we have is still pension funding.

The one quarter where no sacrifices, no compromises must be made. Toss the band program. Screw math textbooks. Fuck scientific research. The pension is holy! It must not be touched! So yes, we are looking at the future, and these people will doom it.

Even if we're not playing the blame game - there is not much we can do productively to save ourselves unless pension compromise can be brought to the table. Unfunded pension liabilities are the threat to our economic existence - the over-promised benefits are really going to gut us. Even if we continued along this path of "everything must go in the name of funding pension liabilities", it's still not enough. Without cuts to pensions we're screwed no matter what.

rajpaul• 15 years ago

I'm seeing more of these intergenerational conflict articles coming to the surface now. I'm not surprised it took so log for it to happen. I'm surprised that baby boomers are allowing it to happen at all.

I can't imagine baby boomers wanting to watch network news or read mainstream websites that bring light to these inequalities. It's eyeballs and wallets that dictate content, and it's the boomers who have both.

sudonim• 15 years ago

In my parents generation, you made an investment and chances are it would go well. Since I left college, you made an investment and chances are it wouldn't go well.

By the time my parents were my age, they were married and had bought their first house in connecticut thanks to a loan from my dad's employer.

My parents bought property in connecticut, singapore, london, indonesia and did pretty well with that over the years. They rented out places and built a pretty decent nest egg. Property prices didn't go down between the times they bought and sold property.

It's a different world now. The best way to build wealth is to play both sides of the fence so you make money in both creation and destruction. For me, I'm betting that I can create software of value to enough people that I can build wealth. I've hedged my bets by getting some % of the current company I work for, but if I stay at this salary for the long haul, I will never have financial security.

It's a little bleak. I pity the people who swallowed the blue pill and work for some large corp. Some will get into the top tier and be phenomenally wealthy. The rest, I'm not so sure.

lotharbot• 15 years ago

Our own cperciva wrote an interesting take on wealth inequality:

http://www.daemonology.net/blog/2011-01-10-inequality-in-equ...

The elderly should have significantly more accumulated wealth than the young, because they've had longer to save. How much more, I couldn't say. But I'm always skeptical of attempts to tug at my heartstrings by pointing out that "those people" have more wealth than "these people" without some sort of systemic model to back up the complaint and explain what the proper level of inequality should be.

fr0sty• 15 years ago

This article (or one like it) needs to see wide circulation as a counterpoint to the posted article.

All things being equal and assuming some sort of positive savings rate and return on investment older people will _always_ be richer than younger people.

What's more when your denominator is so small (old / young) the increasing X% just becomes silly. If their average wealth decreases $600 (which is the projected impact of rising gas prices next year, I believe) the elderly will then be 56X as wealthy.

Personally, the fact that the average not-old person is swimming in consumer debt, has a 0% savings rate, and that by their own choosing is the real story and one that no one seems willing to touch.

Older Americans are 47 times richer than young

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