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Reflections on Americans’ Net Worth
Hraness cites a source capture. The source author remains the source.
gist
Bryan Caplan reads the 2022 Survey of Consumer Finances net-worth table by age and says populist "can't afford" stories collapse against it. Median net worth is six figures by the mid-30s, the 75th percentile are millionaires by their mid-50s, and a quarter of Americans retire staggeringly wealthy. Wealth inequality is mostly age: the young are poor because they are young, and a high savings rate beats a high income. He treats Social Security as gerontocratic waste, since a majority could retire without it, and calls leftover complaint psychological rather than economic.
ideas
- Age, not class, drives most wealth inequality. The richest 65-69-year-olds are worth about 30x the richest 18-24-year-olds; almost all low-wealth Americans are young.
- Absolute net worth is already high. Median six figures by the mid-30s; 75th percentile millionaires by mid-50s; 90th percentile by around 40. Middle-aged "can't afford eggs" claims are nonsense.
- Savings rate is the wealth mechanism. High income is neither necessary nor sufficient: a spendthrift high-skilled worker stays at zero, a Costco cashier with a high savings rate becomes a millionaire.
- Social Security is gerontocratic waste. Median net worth peaks around $400k; Caplan's ballpark is that 60% could retire without it, including by tapping home equity. Gerontocratic policy is itself a cause of inequality.
- Complaint at high net worth is psychological. If net worth is several hundred thousand and you still feel economically injured, the problem is neurotic, not economic.
quotes
“The richest Americans aged 65-69 are worth about 30x as much as the richest Americans aged 18-24.”
“A high-skilled worker who blows his whole paycheck week after week ends up with a net worth of roughly zero.”
“The U.S. is obsessed with ensuring the financial security of elderly Americans who already have more wealth than they know what to do with.”
“If you’re still complaining about your economic suffering when your net worth is several hundred thousand dollars, your problem is not economic, but psychological.”