The Rich Are Getting Older, and Richer

If you have read the essay in Chapter 10 of my text for any of the last several editions, you will be familiar with the analysis by age of the 400 richest Americans, compiled annually by Forbes. They recently came out with their 2015 rankings and it caught the attention of Richard Frank of CNBC, who just wrote about the results for the NYTimes.

In its most recent World’s Youngest Billionaires list, Forbes tallied a record 46 under 40, part of a “youth revolution” in the three-comma club. CNN Money reported this year that a growing share of today’s rich are under 65. “America’s über-rich are getting younger and younger,” the report said. “Call it the Mark Zuckerberg trend.”

Yet new research shows that despite their high profile, the young rich are a minority and the wealthy as a group are actually getting older. A study by Edward Wolff, a wealth expert and economics professor at New York University, found that the median age of the wealthiest 1 percent of Americans increased to 63 in 2013 (the latest year available) from 58 in 1992.

A study released this summer by the Federal Reserve Bank of St. Louis found that the median wealth of old families (those with heads of household over the age of 62) rose 40 percent from 1989 to 2013, to $210,000. The median wealth of middle-age families (40 to 61) and young families (under 40) both fell by over 25 percent. “The gap has widened considerably over the past quarter-century — in favor of old people,” the report said.

For the 12th edition I was relying on data from 2013. Not much has changed between then and now, and my conclusion still stands: "The wealthy are disproportionately old, and among the wealthy, it is the oldest members who tend to have the greatest wealth."