About half of US households (not individuals) report less than $60k in assets (which is assets after subtracting debts). They may live in a nice home and have nice cars – but with debt.
Young households typically have the lowest assets. The quote “50% are under $60k” makes it sound like half the country is poor but is mostly measuring “life cycle” issues where wealth accumulation of those who are younger is less than older people just due to time/years to save.
Second, in the 1980s, 70% of retirees had pensions; today its around 14%.
In the 1970s, Congress enacted IRAs and later 401(ks), which gave incentives to workers to save, invest and self-fund their future retirements, and that is what they did. Thus, today’s retirees have more assets because they no longer have pensions and did what Congress asked them to do. This should be viewed as a net positive (versus not saving).
Third, the size of the population in each age group is very different today than decades earlier. In 1984, 11.3% of the population was 65+, while today 18% is 65+. A larger group is going to have more assets than a smaller group in 1984.
The distribution of assets by age range between 1984 and 2025 is surprisingly similar even without taking into account the group size differences. In 1984, the <35 group made up 54% of the US population but today makes up 45% – which partially explains why the group, collectively, has less assets – it’s a smaller group
Here’s another way to look specifically at how the demographic changes impacted asset accumulation.
📊 1. Demographic Group Size
- 1984:
- Under 35 made up ~54% of the population.
- Age 65+ made up ~11%.
- 2025:
- Under 35 is ~45%.
- Age 65+ is ~18%.
- Implication:
- When the younger group shrinks as a share of the population, their share of total wealth naturally looks smaller.
- Conversely, the larger older group holds more wealth simply because there are more of them.
- This is a composition effect — the denominator changed, not just the numerator.
📜 2. Retirement System Shift
- 1980s: Pensions were still common; retirees often relied on guaranteed defined benefit plans.
- Post‑1980s: Congress incentivized self‑funding through IRAs (1974) and 401(k)s (1978, widespread in 1980s).
- Outcome:
- Today’s retirees have larger asset balances because they were asked to save and invest.
- Retirement wealth shifted from collective promises (pensions) to individualized accounts (401(k), IRA, brokerage).
- This created both asset inflation (retirees hold more financial assets than ever) and inequality (those who didn’t or couldn’t save are left behind).
⚖️ Combined Effect
- Demographics + policy together explain why:
- The under‑35 group has a smaller percent of assets today (fewer people, earlier in the life cycle, often burdened by debt).
- The over‑65 group has more assets (larger cohort, decades of self‑funded saving, home equity appreciation).
- It’s not just that older households are wealthier — it’s that the system asked them to be, and the population structure magnifies their share.
✅ Bottom line:
- The smaller under‑35 group and larger 65+ group explain much of the wealth distribution shift.
- Policy changes (pension fade, IRA/401(k) rise) amplified the effect, making today’s older households far more asset‑rich than their 1980s counterparts.
