Baby boomers, those aged between 45 and 64, may make up less than a quarter of Australia’s population but they hold more than half of the nation’s wealth. That’s according to a study by McCrindle Research, which broke down the household net worth of different generational groups as well. We also found out that the top 20% of the richest Australians hold 62% of the country’s private wealth while those at the bottom end of the scale have less than 1%.
The wealth distribution imbalance isn’t just a problem the US; the richest 20% of Australians have an average household net wealth of $2.5 million while the poorest 20% have around $35,500; in other words, the richest Australians have 71 times more wealth than the poorest. Wealth includes a combination of accumulated income and assets that are owned.
The median price for a house currently sits at $720,000.
The top 20% will most likely be baby boomers given that they hold 53% of Australia’s private wealth. Here’s a breakdown of wealth distribution between different generational groups in the country.
Group | % of Population | Average Household Net Wealth | % of Wealth in Australia |
---|---|---|---|
Generation Y (age 25-34) | 15% | $268,800 | 7% |
Generation X (age 35-44) | 14% | $573,300 | 14% |
Younger Baby Boomers (age 45-54) | 13% | $944,900 | 23% |
Older Baby Boomers (age 55-64) | 12% | $1,239,700 | 30% |
Builders (age 65+) | 15% | $1,040,550 | 26% |
As you can see, baby boomers collectively make up a quarter of Australia’s population yet they own over half of the nation’s wealth.
“It’s a generation that has experienced an economic miracle,” McCrindle social researcher Mark McCrindle said.
Comments
15 responses to “Baby Boomers Own More Than Half Of Australia’s Wealth”
Heres the thing. Boomers didnt have superannuation of any significance when they started working, and were told “go build your own wealth for retirement”, so why are people so surprised that they did?
Side Note: I didnt realise that 1970 was a boomer year. Was always Gen X when I was growing up, when did society change that boundary? And being that year, I did have super from the start of my working career, which is going to fund a pretty juicy retirement.
That does seem to be big expansion of the 20yr baby boom period 1945-1964 just to make their figures work.
“Lies, damned lies, and statistics”
Yeah, thats what I was thinking. Maybe they just cant accept that Gen X is quickly getting to retirement age.
If you didnt pick up on it, I was born in 1970, and this is the first time I’ve ever seen that period being referred to as boomer. Was always 1965-ish as the starting point for Gen X, but it seems that at some point they decided it was a 10 year band starting with now,
My parents were boomers, not me and my sisters.
My personal situation is looking great for retirement, but thats a combination of luck when I started working (great super scheme, put 5% in my entire working life) and good planning when I eventually bought a property 10 years ago.
Not everyone will be that lucky, but a lot of Gen X will get the benefit of property ownership and quality self funded retirement, so whatever the basis for this chart is, its not going to change any time soon.
1945-50 = post war baby.
The boom started in the 50s.
That’s an excellent comment.
There’s a good link here about the timeframes,
http://www.theatlantic.com/national/archive/2014/03/here-is-when-each-generation-begins-and-ends-according-to-facts/359589/
Also, your comment about building wealth is also fantastic. Does the measure of wealth include Super Annuation? That could play significantly in assessing the wealth.
Property prices have skyrocketed in the last 20 years, so people who bought in early made a killing. This could contribute significantly to Spandas’ basic message.
A better measure is to look at the top 5% and the bottom 50%. In the US, the gap has widened significantly and it would be interesting to see how Australia fares compared to the us.
Apologies. Wrote this in a rush.
Its hard to comment here without sounding like bragging :/ For me, Super is definitely part of how I personally measure my position.
My path was very similar to my dad’s. We both bought our property around the same age, and I’m on track to pay it off roughly the same age he did. The big difference is super – he had none, I ended up with one of the best we’ve ever seen.
The difference in retirement is him having a Vet Affairs pension, versus me having the same disposable income as working, if I retire at 57. Or earn more in retirement if I go to 60 or beyond.
As I said, sounds like bragging, when really it was just the luck of an ignorant kid getting a Government job. At 19, retirement and my super pension was the last thing on my mind. That changed a couple of years later.
Doubt its part of this though, its not exactly easy to predict Super.
Id suggest researching simple ratios of average house prices, percentage of income oh and average earnings vs living expenses. Every dollar earned today is worth more than 5x less purchasing power than baby boomer money.
News Flash: People who have been alive longer and earning income for a greater period have more wealth…… Next after this note from our sponsors…….. water sometimes wet
“People who have been alive longer have more money”
If that was the case we could expect to see a greater accrual of wealth in the >65 category vs. all other categories.
While, as a general rule, there may be a relationship between time spent working and total wealth, such a proposal doesn’t properly portray the economic circumstances that have influenced the wealth owned within each generation.
Yeah, but the over-65s have been drawing down on their wealth as they go.
If that was the case we could expect to see a greater accrual of wealth in the >65 category vs. all other categories.
That would be true if the majority over 65 were not retired and spending their super/wealth instead of earning more money.
“Those who have been Working longer, have more money”
When you start subtracting the years the ‘Builders’ have continued to live, whilst funding themselves with their earned wealth, it seems fair to me!
Yeah, including people born in 1970 as “boomers” is pretty sketchy IMO. As far as I am aware, no one extends it that far. Even to the mid-60’s is pushing it, as some cut it off at 1960.
I couldn’t find a link to check the original research – it would be interesting to see if they are upfront about the definition shenanigans.
sorry…
Thing is people are reading this biased article and are wanting to penalize the baby boomers for heaven forbid working their guts out all their lives. They saved, purchased their own homes and invested, going without all the gadgets and holidays the younger generation enjoy. We did this with the premise that there would be no pensions available as there are going to be so many of us retiring at the same time, Governments subsequently introduced mandatory membership of super funds. Any property investment was undertaken by going without and any negative gearing benefits are being paid back in the form of capital gains tax. There are more of us and we have worked longer. Once non baby boomers have a huge nest egg in their super fund, the Government will then want a piece of that as well. There are far more long reaching reasons for the high property prices, and the younger generation is not squeezed out, they just want the biggest and flashest in the best street house. Just start off with a small apartment or a cheap hovel and do it up and spend less on designer clothes, trips overseas, going out to restaurants, the latest iphone, ipod, iwatch, I see you all hanging out of pubs and clubs and having a merry old time. My husband and I worked 5 jobs between us and holidays were far and few between. We worked the longest and our taxes will not be providing for a pension for us, we will not be getting any hand outs. So isn’t that a fantastic thing for society?? Get real people, this article is a lot of rot. My kids are not baby boomers and they have property without our help, just taken our lead. LETS TAKE A LOOK AT FOREIGN OWNERSHIP OF AUSTRALIAN REAL ESTATE, and I mean a real study including under the carpet, loop hole and back door shonky deals, that may be a far more interesting project.
Every generation since the baby boomers has done it more difficult- fractional reserve banking