Baby Boomers have been the wealthiest generation in the U.S. by a big margin for a while now, with their wealth continuing to grow in the last 20 years.
If you’d like to find out how you compare to other Baby Boomers and whether or not you might be considered “wealthy,” stick around until the end!
What is Considered “Wealthy”?
Due to things like inflation and shifting perceptions, the threshold for being considered “wealthy” in the United States can change quickly. This was most recently demonstrated by a survey conducted by Charles Schwab in June, which highlighted how Americans’ perception of wealth has changed following the Covid-19 crisis.
Back in January of this year, the average American said a net worth of around $935,000 would allow them to be “financially comfortable,” while an accumulated wealth of $2.6 million is what it takes for someone to be considered “wealthy.”
Just roughly six months later, the average American’s idea of what it takes to be “wealthy” fell by over 20 percent to a net worth of $2 million. Meanwhile, over the same period, the net worth required to be “financially comfortable” fell by 30 percent, to $655,000.
As you can imagine, figures varied quite a bit in both surveys depending on which part of the US respondents were living in, but there we have it: you currently need a net worth of 2 million bucks to be considered “wealthy.”
Is the Average Boomer Wealthy?
An analysis of Federal Reserve data conducted toward the end of last year found that the average Baby Boomer household had a net worth of $1.2 million.
From this, you might infer that the average Boomer has a net worth around half of what’s required to be deemed “wealthy” today. However, it’s important to note that this $1.2 million figure is for the average Boomer household, while the aforementioned $2 million net worth required to be considered “wealthy” is for an individual.
So, the average Boomer is actually quite a long way off. Still, they dwarf the net worth of the average Millennial household, which has an average net worth of just slightly over $100,000.
How to Calculate Your Net Worth
Now that you know what it takes to be considered “wealthy” today and how the average Boomer compares, you probably want to see how you stack up against those benchmarks.
To calculate your net worth, you need to work out the value of all of your assets combined and deduct any liabilities (debts) from this total.
Assets many Boomers hold include things like property, savings in the bank, equity in a business, bonds and stocks, annuities, vehicles, and high ticket personal possessions. Debts may include personal loans, credit card loans, and other types of debt, which you’ll need to pay off at some point.
A Quick Summary
- Baby Boomers are the wealthiest generation in the US (and most other developed countries), but is the average Boomer considered “wealthy”?
- Americans’ threshold for what it takes to be wealthy has fallen considerably since the start of the year, with a Charles Schwab survey carried out in June finding that the average American thinks a net worth of $2 million or above now means a person is “wealthy.”
- This compares to the $2.6 million average figure Americans reported in a similar survey back in January.
- Based on this definition, the average Boomer isn’t “wealthy,” but they are nevertheless several times richer than the average Millennial.
- To calculate your net worth, you simply need to add up the value of all of the assets you hold and take this total away from any liabilities you’ll be due to pay at some point.