As the oldest working generation, baby boomers have one foot in the workforce and another in retirement. Time and favorable economic conditions have made it easier for this generation to build wealth compared to younger generations.
A 2022 study projects that wealth transferred through 2045 will total $84.4 trillion—$72.6 trillion in assets will be transferred to heirs, while $11.9 trillion will be donated to charities. Greater than $53 trillion will be transferred from households in the Baby Boomer generation, representing 63% of all transfers.
Average net worth for baby boomers
Baby boomers are the generation of workers born between 1946 and 1964. The oldest members of this generation are in their mid-70s, well into their retirement years. The youngest members are still a few years away from exiting the workforce altogether.
Members of this generation have an average median net worth between $200,000 and $255,000, according to the Federal Reserve’s 2019 Survey of Consumer Finances. Their mean net worth sits roughly between $970,000 and $1.2 million.
How does the average baby boomer’s net worth stack up against other generations?
The average baby boomer’s net worth is significantly higher compared to other generations. Gen Zers’ average net worth sits at $76,000. The average Millennial over age 35 stands at over $400,000. Those in Generation X have average net worths between $400,000 and $833,000, and older generations including Baby Boomers and the Silent Generation have average net worths that creep into the millions.
View this interactive chart on Fortune.com
What has shaped the boomer generation’s net worth and financial future
Several factors have played a role in this generation’s ability to build and grow their net worths. Boomers have benefitted from a combination of time, societal norms, and stronger economic conditions compared to younger generations.
Certain societal norms made it easier for boomers to grow their net worth
Compared to younger generations, boomers were more likely to marry and marry at a younger age. According to Pew Research, only 44% of Millennials were married in 2019, compared with 53% of Gen Xers, 61% of Boomers and 81% of Silents at the same age.
“With Boomers, as they married young there were often two wage earners in a household so net worth increased. Millennials are often living on one salary as they might not marry young or marry at all,” says Molly Ward, Financial Professional with Equitable Advisors based in Houston Texas.
Baby boomers have time on their side
As the oldest working generation, boomers have had more time to build their wealth and recover from any economic downturns they’ve faced. And it’s paid off. Census data shows that baby boomers are nearly nine times wealthier than millennials.
“Monthly pension benefit payments along with monthly social security payments for retirees of these generations provided(s) predictability for spending during retirement years while their home equity and stock market portfolios might not have been tapped and continued to compound over many years,” says Ward. “However, high interest rates were a real thing while boomers were building their wealth. While interest rates have leaped recently, those generations saw them much higher than they have been in the adult lifetimes of Gen X and Millennials.”
Boomers benefitted from an affordable housing market
Homeownership is touted as a key step in building lasting wealth and baby boomers were able to hit this financial milestone earlier than younger generations. According to the Berkley Economic Review, 45% of baby boomers were able to buy their first home between the ages of 25 and 34, compared to only 37% of millennials between the ages of 25 and 34 own homes.
3 ways baby boomers can grow and protect their net worth
While baby boomers’ path to building wealth has been a different trajectory compared to other generations, there are still ways for boomers to continue to grow their net worths in their later years.
Pay down outstanding debt. Your net worth is the value of what you own, minus what you owe. Eliminating liabilities in the years before you retire and begin living off of your retirement income is key to not only protecting your net worth as you age, but also helping you avoid dipping into your retirement savings and having to live off of less.
Max out your retirement account. If you haven’t yet retired, make it a priority to contribute the maximum amount to your retirement savings accounts. By the time you’ve reached your 60s, you should be saving at least 8 times your salary if you hope to retire comfortably and maintain your lifestyle. Some retirees choose to live more frugally in their later years, however, it’s impossible to predict if you’ll have high healthcare costs or unforeseen expenses. Saving more than you think you need is key to ensuring that you don’t have to take on debt in your later years and diminish your net worth.
View this interactive chart on Fortune.com
Create a post-retirement budget. Think carefully about the income you’ll have available in your later years and how you’ll stretch that money so that it sustains you throughout your golden years. “In your 70s and beyond, the focus usually shifts to budgeting and portfolio withdrawal. Retirees can either withdraw a set amount of money each month or withdraw a percentage of the portfolio balance each month,” says Paul Deer, CFP and Vice President, Advisory Service at Personal Capital. “With the first strategy, the amount of income is more predictable, which makes budgeting easier. But you generally have more control over the portfolio’s overall drawdown and potential longevity with the percentage method.”
This story was originally featured on Fortune.com
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