Young Americans Are Losing Ground As Older Generations Pull Ahead

The wealth gap between younger and older American families widened from 2022 to 2025, according to a Federal Reserve report released Friday. 

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. 

The wealth gains came even as higher-income families saw their incomes decline, while lower-income families saw modest increases. Rising asset values helped older, affluent families pull further ahead. “Net worth declined substantially for the youngest families, while exhibiting large gains for the oldest,” the report said. The report attributed younger families’ losses primarily to the unwinding of business-equity gains from 2019 to 2022.

The findings echo financial concerns expressed by young Americans. In Harvard’s fall 2025 youth poll, 43% said they were struggling or getting by with limited financial security. 

The findings illustrate a K-shaped economy, in which some Americans build wealth while others fall behind. Stock prices climbed over the period, rewarding Americans who held stock directly or through retirement accounts. Those without stock investments missed out on those gains. Consumer prices rose about 10% over the period, eroding purchasing power. 

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 said the oldest group’s gains were “primarily driven by an increase in the value of retirement accounts.” 

Treasury Secretary Scott Bessent has argued that the Fed’s recent policies deepened the divide by boosting asset prices while inflation eroded purchasing power and made homeownership harder for younger Americans.

“By failing to deliver on its inflation mandate, the Fed allowed class and generational disparities to worsen,” Bessent wrote in a spring 2025 essay. The Federal Reserve has a dual mandate to pursue maximum employment and stable prices, with a long-term inflation target of 2%. 

The Trump administration has sought to give younger Americans an early foothold in the stock market through Trump Accounts.

“They [Trump Accounts] collapse the distinction between earners and owners by making everyone an owner—all while keeping ownership private,” said Bessent. 

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.

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