Boomers 60+ are the richest generation in history; millennials are losers, says study
People (born between 1946 and 1964) are the richest generation that has ever lived, according to a new report from Allianz, thanks to affordable housing and strong stock markets that have provided big returns on savings.
On the other hand, those (born between 1981 and 1996) have been the “biggest losers” in the race for wealth, due to “crisis after crisis”, reveals the company’s 2024 Global Wealth Report.
“A unique historical situation — strong economic growth, affordable housing markets and booming stock markets — has allowed (boomers) to accumulate considerable wealth,” the insurance and asset management giant wrote in its report released Tuesday. (8).
Meanwhile, they saved them during crises such as the 2008 financial crisis, the Covid pandemic and a period of “really painful” inflation. This means that the returns they earn on the funds saved were significantly lower than those of previous generations, and the total accumulated over their lifetime is considerably less impressive.
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In the report, Allianz created a model with a group of hypothetical individuals from different generations, tracking the returns on their savings — and corresponding wealth — throughout their respective economic cycles.
An American born in 1960, for example, with an annual savings rate of 10% over 40 years will have generated lifetime savings of more than 850% of his or her disposable income.
An American from Generation Z (born between 1997 and 2012), in turn, who saved at the same levels, will now have a fortune equivalent to 606% of their disposable income, with an annual rate of return of 6.7%.
But even a 200% difference between Generation X (born between 1965 and 1980) looks attractive compared to what they achieved.
Those born in 1984 — who saved at the same rate as their parents’ generation — will see their total lifetime savings reach just over 430% of their disposable income.
Of course, people still have a few decades to continue growing their savings while they work. Even so, Allianz suggests that they will never accumulate the same levels of wealth as , who make up 670% of their lifetime disposable income.
Gen Z—the youngest generation entering the workforce—does better than their peers, but not as well as the older generation.
Gen Z Americans born in 2004 can expect their total savings to reach 766% of their disposable income by 2063, surpassing both Gen X and .
That said, “even with the same savings behavior, no generation can match the wealth accumulation enjoyed by the ,” Allianz wrote.
New wealth dynamics
The may be the richest generation that has ever existed, but there is still time for another group to take that title.
Who this group will be is still up for debate.
Real estate brokerage Knight Frank is betting on , claiming that due to a $90 trillion “Great Wealth Transfer,” those between the ages of 28 and 43 will currently be the “richest generation in history.”
Allianz believes this theory has potential, but says the wealth transferred may be less than expected: “The day will come when they will bequeath their wealth to their children and grandchildren.
“Projections indicate that in the U.S. alone, more than $84 trillion in assets will be transferred to younger generations by 2045, with more than $53 trillion of that wealth originating in households. This sets the stage for them to become the richest generation in history—although not just through their own efforts.”
Generation Z is also in the race, with chances of surpassing the wealth of , thanks to their own ventures and better economic conditions.
“Taking into account the end of the savings glut and the growing demand for capital to drive green and digital transformations, Gen Z actually has a good chance of surpassing all of its predecessors—if they align their savings behavior with the new realities,” added Allianz.
