Feb 8, 2024 - Economy

Americans under 40 saw a massive increase in wealth since 2019

Data: New York Fed; Chart: Axios Visuals
Data: New York Fed; Chart: Axios Visuals

Americans under 40 saw their wealth rise by a staggering 80% since pre-pandemic — a far higher rate than any other age group, per new data from the Federal Reserve Bank of New York.

Why it matters: This is about "stonks and stimmies" — as well as the risk-taking proclivities of youth.

  • In other words: During the pandemic, those under 40, many flush with stimulus checks, took to the stock market and saw big gains.

Zoom in: The big differentiator between the young and the old was in financial assets, according to the NY Fed's analysis.

  • Those under 40 saw the value of their financial assets rise more than 50% from Q1 2019 to Q3 2023. Those who were 40-54 saw a 3% increase, and those over 54 saw their financial assets rise 20%.
  • The under-40 crowd's share of financial assets invested in stocks and mutual funds rose by 39%, while the share for those 40-55 decreased, and for the 55+ crowd, it grew by 12%.
  • Of note: The data doesn't distinguish between changes in asset allocation and changes in returns (more money gained from those investments). The results are a combination of both.

What they're saying: The shift "likely reflects the fact that younger adults, being farther away from retirement, can afford to invest in risky assets at a higher rate than older adults," the researchers write in a blog post published Wednesday.

  • "The youngest age group is also the poorest and thus received much of the COVID-era fiscal stimulus, granting them excess savings to invest in equities."
  • Many of these folks also didn't have to make a student loan payment for most of that period.

Meanwhile: All age groups saw gains in the value of their homes real estate assets increased about 40%.

Reality check: Overall, the older cohort is far wealthier than the young. The net worth of those 55 and over was $97 trillion in the third quarter of 2023.

  • That's compared to $8.6 trilly for Americans under 40.
  • Plus: That wealth — and these wealth gains — were not distributed evenly. Plenty of younger people spent their stimulus checks right away on immediate needs.

The bottom line: If you just measure it in dollars, young adults won the pandemic.

Go deeper