Seniors Dominate US Economy, 70 Percent of Wealth

Baby boomers are driving the U.S. economy, The Wall Street Journal reported.

That's because Americans 55 and over control nearly 70% of U.S. household wealth, up from 50% in 1989, according to the Federal Reserve.

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The group's overall assets increased to a record $114 trillion by the end of last year, up from $84 trillion just four years ago, according to Fed data.

According to Moody's Analytics, older Americans' dollars amount to 45% of U.S. personal spending. Three decades ago, they accounted for 29%.

The numbers indicate the role baby boomers play in the U.S. economy.

"Their stock portfolios, retirement savings and paid-off homes have swelled in value over decades of growth," the Journal reported. "Hours once spent raising young children and working can now be devoted to golf, concerts and brunch."

Older Americans are fueling a sustained boost to the U.S. economy. Benefiting from gains in the stock market and housing market in recent years, they are accounting for a larger share of consumer spending.

Much of their spending is going toward higher-priced services such as travel, healthcare, and entertainment, putting further upward pressure on those prices — and on inflation. Such spending is relatively immune to the Federal Reserve's push to slow growth and tame inflation through higher borrowing rates, because it rarely requires borrowing.

"The baby boomers are the richest retiring generation we've ever had," said Edward Yardeni, president of Yardeni Research. "Not everybody is well-off, but we've never had a retiring generation with this much wealth. That's one of the major reasons why the economy is strong."

Many baby boomers have purchased homes in recent years as they migrate to other areas.

Moody's Analytics analysis of Equifax data said Texas, Florida, Arizona, Georgia, and the Carolinas have gained a net half-million people — nearly half are from California, New York, and Illinois — who are age 55 or older from other states since 2021, the Journal reported.

The Associated Press contributed to this story.