Assets and Liabilities of Younger vs. Older Households from St. Louis Fed

The bar plot visualizes a comparison of household financial ratios for two age groups, labeled as "Young" and "Old," across two distinct decades—the 1950s and 2010s. The ratios presented are assets to income, liabilities to income, and liabilities to assets.

For the "Young Households" category:

• The assets to income ratio shows a substantial increase from 1.41 in the 1950s to 2.34 in the 2010s, suggesting that the younger demographic has accumulated more assets relative to their income in the later decade.
• The liabilities to income ratio also rose, from 0.57 in the 1950s to 1.45 in the 2010s, indicating that younger individuals carried more debt relative to their income in the 2010s.
• The liabilities to assets ratio increased from 0.41 to 0.62, reflecting a higher proportion of debts in comparison to assets in the 2010s for this age group.

For the "Old Households" category:

• There is a marked rise in the assets to income ratio from 2.93 in the 1950s to an even higher 6.75 in the 2010s, which could imply that older individuals have become wealthier or are better at asset accumulation or savings.
• The liabilities to income ratio shows an uptick from 0.37 to 1.25 across the compared decades. This suggests that the older age group in the 2010s has a higher debt load relative to their income than their counterparts in the 1950s.
• The liabilities to assets ratio exhibited a slight increase from 0.13 to 0.18, which is relatively modest compared to the other increases and may suggest that while assets have grown significantly, the growth in liabilities has been relatively restrained.

Overall, the plot indicates that both young and old groups have seen an increase in their assets relative to income over time, but this has come with an increase in liabilities as well. However, the older age group shows a more pronounced increase in assets relative to both income and liabilities, suggesting different financial strategies or economic conditions affecting the two age groups over time.

Source : Assets and Liabilities of Younger vs. Older Households | St. Louis Fed (stlouisfed.org)