Household net worth or wealth is an important defining factor of economic well-being in the United States. In times of economic hardship, such as unemployment, illness, or divorce, a person’s or household’s financial assets (e.g., savings accounts) are an additional source of income to help pay expenses and bills. For individuals and households with a householder 65 years and older, wealth is also an important source of post-retirement income.
For all households, median household net worth decreased by 35 percent from 2005 ($102,844 [+/- 2,606]) to 2010 ($66,740[+/- 1,955]) (All comparisons are significant at the 90 percent level. All dollar figures are in 2010 constant dollars). This decrease in median household net worth reflects the declines in housing values and stock market indices. However, excluding home equity, median household net worth increased by 8 percent from 2009 ($13,859) to 2010 ($15,000).
Compared with those who are older, the young have limited income or savings to acquire various assets, accumulate wealth, and diversify their wealth holdings. Between 2005 and 2010, median net worth decreased for all age groups but more for older householders than for younger ones. For householders 65 and older, median net worth was equal to $195,890 in 2005 and $170,128 in 2010; for householders under 35, median net worth was equal to $8,528 in 2005 and $5,402 in 2010. When looked at in percentage terms, the story is quite different (see Figure 1). Median net worth decreased by 37 percent for householders under age 35 compared with a 13 percent decrease for householders 65 and over. Thus, even though the 65 and over population lost more net worth in absolute terms, the younger age groups were disproportionately affected in terms of the share of net worth lost. The group with the largest decrease in percentage terms was the 35- to 44-year-old group, whose net worth decreased by 59 percent.