When it comes to wealth measured in billions and millions, a recent article in Bloomberg, “Octogenarians Rule the Rich,” reports that of the 25 richest people in America, six of them are well over 80 years old. New IRS data reveals that that people over 80 may make up only 3.7% of the total population, but they control a far larger share of the national’s wealth than people who are under 50.
The wealthy have most likely always been older than the general population, because it typically takes some time to amass great wealth. Facebook’s Mark Zuckerberg, the world's fifth-richest person at age 33, is the exception to the rule.
The IRS regularly analyzes the wealth of the richest Americans in its Personal Wealth Study. This research looks at those potentially subject to the estate tax, which is imposed on individual fortunes of $5.5 million or more. The most recent study estimated personal wealth in 2013. It found that 584,000 Americans, or about 0.2% of the U.S. population, have a combined net worth of $6.9 trillion. People in their 80s and 90s control $1.2 trillion of that wealth. Adults under 50 (about 43% of the population), have only $1 trillion.
Research from the University of California-Berkeley found that the share of U.S. wealth held by the top 0.1% has more than tripled from 1978 to 2012. That’s an increase of 7% to 22%.
Wealthy people in their 80s have the highest average net worth of any age bracket in the U.S. These richest Americans may be far wealthier than the IRS estimates. This is because wealth managers and estate planning attorneys use strategies like trusts to help the rich pass money to their heirs tax-free before they die.
The IRS research provides a unique insight into the portfolios of the wealthiest Americans. For example, the richest Americans invest heavily in businesses and non-public stock. Their personal residences also make up a small part of their wealth—just a little more than their art collections.
Octogenarians are living longer into their 80s and 90s and are outliving poorer Americans by growing numbers. There is now a marked disparity between the death rates of the rich and “regular” Americans. In the 1980s, these numbers were about the same, but in recent years, the wealthiest men in their 80s and 90s had mortality rates 40% lower than average. It is another reason why it’s good to be a billionaire!
Reference: Bloomberg (August 23, 2017) “Octogenarians Rule the Rich”