(Bloomberg) -- Young Americans far outpaced older generations in wealth growth since the pandemic, thanks in part to the boom in stocks, according to Federal Reserve Bank of New York research.
For adults under 40, aggregated wealth jumped by 80% since 2019, compared with 10% for those who are 40 to 54 and 30% for those over 55, New York Fed economists wrote in a blogpost.
The youngest generations, by far the poorest, received much of the Covid-era fiscal stimulus, giving them extra savings to invest in equities, the researchers found.
Stocks boomed during the period — but they also are risky assets that could quickly reverse wealth growth if markets tank.
Overall, the collective wealth of young adults remains a fraction of what older people are able to accumulate over the decades. As of 2019, individuals under 40 held just 5.7% of total US wealth while comprising of 37% of the population, the New York Fed economists wrote.
That also helps explain the outsize wealth growth in percentage terms, compared with older generations.
“The under-40 group experienced a much greater increase in equity portfolio share than the older groups did,” the New York Fed economists wrote. “This increased exposure to equities — the fastest-growing financial asset class during the period — enabled younger adults to record higher growth in both financial assets and overall wealth.”