The wealth gap between young and older households in the United States will widen between 2022 and 2025, according to a report released by the Federal Reserve on Friday.
Federal Reserve Consumer Finance Survey disclose After adjusting for inflation, the median net worth of households headed by someone 75 or older increased by 37%, but the median net worth of households headed by someone younger than 35 fell by 23%.
Although incomes of high-income households fell and incomes of low-income households increased slightly, wealth increased. Rising asset values have helped older wealthy households make greater progress. “The net worth of the youngest households fell sharply, while the net worth of the oldest households increased significantly,” the report states. The report attributes the losses among younger households primarily to the unwinding of business equity gains from 2019 to 2022.
The survey results echo the financial concerns expressed by young Americans. In Harvard University’s Fall 2025 Youth Poll, 43% Say they are struggling or struggling to get by with limited financial security.
The findings illustrate a K-shaped economy in which some Americans create wealth while others lag behind. During that time, stock prices climbed, and Americans who held stocks directly or through retirement accounts were rewarded. Those without stock investments missed out on these gains. During this period, consumer prices rose by about 10%, eroding purchasing power.
According to the Federal Reserve, the richest 10% of Americans own approximately 87% of U.S. stock market wealth. Many older Americans hold stocks indirectly through retirement accounts, and the report said gains among the oldest group were “primarily driven by increases in retirement account values.”
U.S. Treasury Secretary Bessent believes that the Federal Reserve’s recent policies have pushed up asset prices, thereby deepening divisions, while inflation has weakened purchasing power, making it more difficult for young Americans to own a home.
“By failing to meet its inflation goals, the Fed will worsen class and generational gaps,” Bessant said. Wrote In a Spring 2025 article. The Federal Reserve has the dual mission of pursuing maximum employment and price stability, and its long-term inflation target is 2%.
The Trump administration is trying to use the Trump account to allow young Americans to gain an early foothold in the stock market.
“them [Trump Accounts] Make everyone an owner while keeping ownership private, thus narrowing the gap between moneymakers and owners. “Bessent said.
The program allows eligible children under the age of 18 to have investment accounts that grow tax-deferred. U.S. citizens with a valid Social Security number who were born between January 1, 2025 and December 31, 2028 are eligible to receive a one-time federal seed contribution of $1,000 when voting on their behalf.