The Elderly Wealthy
IRS data shows that affluent Americans over the age of 80 have as much wealth as those younger rich people under 50.
It is to be expected that older people on average have more money than younger people. A long life makes for more time to generate and grow wealth.
In the U.S., however, a couple of trends have combined to make the elderly rich have an ever greater share of wealth compared to the younger rich than might be expected.
The first of these trends is that after years of increasing, the American life expectancy is beginning to decrease for unknown reasons. The second is that wealthy people are still continuing to live longer than those with more modest or meager wealth.
This has led to rich people over 80 having as much total wealth as rich people under 50 according to IRS data, as Bloomberg reports in "Octogenarians Rule the Rich."
The eventual implications of this could have a significant impact.
Wealthy elderly people will not live forever. In the next couple of decades, an astounding amount of wealth will be transferred from the oldest Americans to younger generations.
If those transfers are done poorly, then considerable wealth could be wasted.
While most of us assume the wealthy have the wisdom to get good estate plans to facilitate the transfer of their wealth that is not always the case. Many either do not have good estate plans in place or they have plans that contribute to costly legal challenges by family members.
It is imperative, therefore, that wealthy older Americans get good estate planning advice if they do not want their wealth to be squandered by their heirs.
Reference: Bloomberg (Aug. 23, 2017) "Octogenarians Rule the Rich."