The wealth gap between younger and older Americans has widened to its largest ever, exacerbated by the slow economic recovery that has hit young Americans disproportionately hard, a new study shows.
With high youth unemployment and mounting student debt, the typical U.S. household headed by a person 65 years of age or older is 47 times wealthier than that of a household headed by someone under 35, according to a new Pew Research study.
The median net worth of households headed by someone 65 years or older was $170,494, up 42 percent from 1984. Meanwhile, households headed by someone 35 or younger had a median net worth of $3,662, down 68 percent from that same year.
In fact, 37 percent of the younger group had a net worth of zero or less, nearly double the percentage from 1984. But the percentage of the older group with less than zero net worth has remained unchanged in 27 years, at 8 percent.
To be sure, assets do accumulate as one ages. But the gap between the two groups has doubled since 2005. Even adjusting for inflation, the disparity is nearly five times the 10-to-1 ratio recorded over 25 years ago.
Part of the explanation is that older Americans are remaining in jobs longer, have paid off more of their mortgages, and can collect Social Security benefits, while younger adults are facing the increasing cost of higher education, dramatically lower housing value, and record unemployment.
In addition, debt played a central role in the wealth disparities between young and old. Households headed by someone under the age of 35 saw their net worth drop by 27 percent due to outstanding debts - particularly of the credit card variety - and unpaid student loans.
Last month, the Federal Reserve Bank of New York revealed that the total amount of outstanding student loans in America will exceed $1 trillion for the first time this year.
Meanwhile, last week the Labor Department announced that teenage unemployment stood at a staggering 24.6 percent in October, up from 24.1 percent the month before.
The Pew Study was first cited and reported by the Associated Press.