Wealth Gap Between Younger and Older Americans Widening, Federal Reserve Reports

<p>The wealth gap between younger and older American families widened from 2022 to 2025, according to a Federal Reserve report released on October 9, 2026. </p><p>The Federal Reserve’s Survey of Consumer Finances revealed that inflation-adjusted median net worth rose 37% for families headed by someone 75 or older but fell 23% for those headed by someone under 35.</p><p>The wealth gains occurred even as higher-income families experienced income declines, while lower-income families saw modest increases. Rising asset values contributed to older, affluent families advancing further. The report stated, “Net worth declined substantially for the youngest families, while exhibiting large gains for the oldest.” The report attributed the losses among younger families primarily to the unwinding of business-equity gains from 2019 to 2022.</p><p>The findings align with financial concerns expressed by young Americans. In Harvard's fall 2025 youth poll, 43% reported struggling or getting by with limited financial security.</p><p>The results illustrate a K-shaped economy, where some Americans build wealth while others fall behind. Stock prices increased during this period, benefiting those who held stocks directly or through retirement accounts. Those without stock investments did not benefit from these gains. Consumer prices rose approximately 10% over the period, decreasing purchasing power.</p><p>The wealthiest 10% of Americans own roughly 87% of U.S. stock market wealth, according to Federal Reserve data. Many older Americans hold stocks indirectly through retirement accounts, and the report indicated that the gains for the oldest group were “primarily driven by an increase in the value of retirement accounts.”</p><p>Treasury Secretary Scott Bessent has stated that the Fed’s recent policies exacerbated the divide by increasing asset prices while inflation diminished purchasing power and made homeownership more difficult for younger Americans.</p><p>Bessent wrote in a spring 2025 essay, “By failing to deliver on its inflation mandate, the Fed allowed class and generational disparities to worsen.” The Federal Reserve has a dual mandate to pursue maximum employment and stable prices, with a long-term inflation target of 2%.</p><p>The Trump administration has aimed to provide younger Americans with an early opportunity in the stock market through Trump Accounts.</p><p>Bessent stated, “They [Trump Accounts] collapse the distinction between earners and owners by making everyone an owner—all while keeping ownership private.”</p><p>The program allows eligible children under 18 to have investment accounts that grow tax-deferred. U.S. citizens born between January 1, 2025, and December 31, 2028, with valid Social Security numbers are eligible for a one-time $1,000 federal seed contribution when an election is made on their behalf.</p>