For Immediate Release: Wednesday, June 20, 2012
Contact: Phoebe Silag or Karen Conner, email@example.com 202-775-8810
Young families fall even farther behind in saving
By Monique Morrissey, EPI Economist
The typical American family saw its net worth fall 39 percent after the collapse of the housing bubble, according to newly-released Federal Reserve data. Younger families were hardest hit, with those in the 35-44 age group—the age when families start getting serious about saving for retirement—experiencing a 54 percent drop between 2007 and 2010.
This is particularly worrisome because younger families were falling behind earlier cohorts even before the Great Recession. Households in the 35-44 and under-35 age groups suffered declines in the wake of two previous recessions without fully regaining the lost ground in the intervening years. The fact that net worth declined for these younger age groups between 1989 and 2010 is remarkable when you consider that the economy grew by a third on a per capita inflation-adjusted basis over this period (though these gains were not broadly shared). Furthermore, younger families should have been saving more to make up for declines in employer-provided pensions and Social Security benefits as the retirement age at which full Social Security benefits can be claimed has been rising.