A century ago, old age in America was closely tied to poverty and financial insecurity. Today, wealth is concentrated among the nation’s oldest generations, leaving Generation Z struggling to afford homes, start families, and build financial stability.
Over the past several decades, economic growth and public policy have shifted wealth toward older Americans. Baby boomers, the generation born between 1946 and 1964, benefited from affordable housing, rising wages, and long term asset appreciation. Generation Z, the generation born from 1997-2012 also known as “Gen Z” is entering adulthood during a period of high housing costs and limited wage growth. Government spending increasingly prioritizes retirees through Social Security and Medicare, which make up more than 30% of the federal budget per U.S. Treasury data. These benefits are limited to people 65 and older. Younger workers now support these systems while encountering fewer opportunities to accumulate wealth themselves.
Nick Maggiulli is the author of “The Wealth Ladder” and chief operating officer at Ritholtz Wealth Management. His work explores long term wealth accumulation and general inequality in the United States.
“For every dollar the U.S. government takes in in taxes, it spends half of that dollar, 50 cents, just on Social Security and Medicare,” Maggiulli said. “As long as half the budget is going to Social Security and Medicare, it’s going to be difficult to reallocate wealth in any meaningful way.”
This concentration of spending reflects how public resources favor older Americans, according to Maggiulli. It also limits the government’s ability to invest in younger generations.
“I think we need economic policies that do more to invest in young people,” Maggiulli said. “I don’t think having them wait their whole life for this money is the right solution.”
Critics argue the coming wealth transfer will resolve generational inequality as young people inherit their family’s wealth. Maggiulli said the timing of that transfer limits its effectiveness.
“The average age of inheritance in the United States is 60,” Maggiulli said. “Most of that money comes much later in life, when it’s far less impactful.”
Blair duQuesnay is an investment advisor and the owner of The Belle Curve, an online finance blog. She delves into long term investing and structural economic inequality.
“Taxing just their income isn’t working if the goal is to redistribute the wealth,” duQuesnay said. “Other than the inheritance tax, your only option is to try to tax investments instead of income.”
Tax exemptions for retirement investments began in 1997 when Congress passed legislation establishing the Roth individual retirement account (IRA), named for Senator William Roth. Ben Carlson wrote about Roth IRAs in his book, “A Wealth of Common Sense,” which covers markets, personal finance, and generational wealth trends.
“It would be cool to see some tax changes that would give tax breaks for baby boomers giving their kids money earlier,” Carlson said. “You’d rather have it in your 20s or 30s when you can use it for a down payment or daycare.”
According to Maggiulli, housing has become one of the clearest symbols of generational imbalance. For many Gen Z adults, homeownership feels increasingly unattainable.
“I still think supply is the answer for a lot of this,” Maggiulli said. “Lower home prices are better for people just starting out trying to buy a home.”
Housing policy plays a central role in concentrating wealth among older Americans. DuQuesnay explained that restrictive government regulations have limited supply and increased prices.
“The best thing that we could do is find a way to allow the building of more types of housing in more places,” duQuesnay said. “Anything that can be done to incentivize the building of more housing stock is the answer.”
Still, housing shortages remain the most visible barrier for younger generations. Carlson said the lack of supply has intensified frustration and financial instability.
“We just haven’t built enough homes in the past 10, 15, 20 years,” Carlson said. “For some reason, it doesn’t seem that the government wants to make it easier to build homes.”
Beyond housing, social welfare programs highlight how resources are distributed across age groups. DuQuesnay said demographic shifts are straining long term sustainability as birthrates fall and the elderly make up a greater portion of the population.
“Social Security will get to a point where it’s sustainable again,” duQuesnay said. “Medicare is a problem, and I do not think it’s financially sustainable.”
Older generations often have more influence in government. They tend to vote, donate and participate in political causes and movements at the highest rates.
Gen Z is often criticized for spending habits and lifestyle choices. Carlson counters that the cost of living has fundamentally changed compared to previous generations, partly due to the explosion of commodities as part of daily life.
“I do think it’s just more expensive to live these days,” Carlson said. “A lot of things that were luxuries in the past are now seen as necessities … It’s just more expensive to live these days, with the internet and iPhones and DoorDash and streamers and all these things that didn’t really exist in the past.”
Despite these challenges, Carlson added that Gen Z has advantages earlier generations lacked. Gen Z benefits from early access to economic participation, and expedited investment offers more long term opportunities than pre-internet generations could receive.
“If Gen Z just starts earlier than the baby boomers did, they’re going to be all right,” Carlson said. “You allow compounding [investment] to do a lot of heavy lifting for you.”
